The International Monetary Fund said on Sunday that it was considering how better to help countries under economic strain because of financial market stress but said it was not targeting particular countries.

The global lender was responding to weekend reports, including one in Japan's Yomiuri Shimbun, that said the IMF would create a new short-term lending facility to prevent the current financial crisis in Europe from spreading.

The newspaper, citing unnamed sources, said the IMF was likely to provide funds for countries like Italy and Spain where government bond yields remain at high levels.

In a statement, the IMF said that over the past year it was reviewing existing lending arrangements, building on reforms begun in 2008 and 2009 to add to its tools for responding to crises.

It did not directly respond to the suggestion that it might set up a new lending facility.

The aim of the review is to enhance the ability of the Fund to mitigate contagion by providing liquidity to countries with relatively strong policies and fundamentals that are affected by heightened global or regional financial market stress, the IMF said.

But it said its efforts were intended to meet potential needs of all its members and were not targeted at particular countries and have no indication when it might come to any decisions.

(Reporting by Glenn Somerville, editing by Sofina Mirza-Reid)

Japan International Monetary Fund