Though the recent global crisis started in the advanced economies, most emerging markets came under pressure; it seemed that no country, especially those most interconnected, was immune from tremendous economic strain. Now, as the crisis abates, there is an emerging consensus that something needs to be done. A better safety net is needed to enable countries with good policies to insure against bad outcomes, especially when they are innocent bystanders caught up in a financial turmoil.
Last week, the IMF took another step toward meeting this need by enhancing its country insurance facilities. (more…)
Filed under: Economic Crisis, Economic research, Emerging Markets, Financial Crisis, G-20, IMF, International Monetary Fund | Tagged: capital flows, contagion, country insurance facilities, emerging market spreads, Flexible Credit Line, global financial safety net, precautionary credit line, regional financial safety nets, reserves, surveillance, systemic crisis, systemic shocks | 5 Comments »