Markets advanced further Wednesday on hopes the International Monetary Fund would get more money and as Greece resumes discussions with private creditors to get them to agree to reduce the value of their holdings of Greek debt. Following a breakdown of talks last Friday, investors remain nervous about what may happen, though sentiment has been shored up somewhat by comments made late Tuesday from Christine Lagarde, the International Monetary Fund's managing director, that the Washington D.C.-based institution was looking at ways to increase its financial firepower, partly to deal with Europe's debt crisis. If the IMF were to have its resources ramped up by governments raising their contributions, then it would have more money available to potentially help Europe in dealing with its debt woes. “More resources means more liquidity which I guess is good for asset prices in the short term, or at least reduces threat of systemic risk in the interim,” said Neil MacKinnon, global macro strategist at VTB Capital. Europe's debt crisis started in Greece over two years ago and investors will be looking to see if the country can negotiate a deal with its creditors that will ease the burden of its crushing debts. Last October, Greece's partners in the eurozone sanctioned a deal whereby Greece's creditors agree to take a cut in the value of their Greek bond holdings to help lighten the country's debt burden. The deal with private investors, known as the Private Sector Involvement, or PSI, aims to reduce Greece's debt by €100 billion ($127.9 billion) by swapping private creditors' bonds for new ones with a lower value.
