Last Wednesday the U.S. Federal Reserve Board announced that it had provided temporary liquidity swaps of $30 billion each with Brazil, Korea, Mexico, and Singapore, thereby significantly expanding the circle of countries that the Fed works with in this manner. This is a very welcome move.
Much sooner than we expected a week ago, the multilaterals (or International Financial Institutions -- IFIs) must be ready to step in with emergency lending.
I have been following the lively exchanges begun by Liliana Rojas-Suarez’s post on the development impacts of the U.S. financial crisis, especially Michael Clemens's provocative post and Nora Lustig’s thoughtful reply.
I am afraid I disagree rather strongly with Michael Clemens argument that the current financial crisis will matter little to long term growth and thus to global poverty.