Liquidity Needs in Times of Stress: Should Latin America go Beyond the IMF? (Event Video)
Large accumulation of international reserves by Latin American countries was central in containing the adverse effects of the global financial crisis. Lines of credit from the Federal Reserve and the new liquidity facility from the IMF also played a key role, at least for some major countries. However, reserve accumulation is not free of cost, Fed support is not guaranteed and IMF resources might not be sufficient at times of systemic crises and may carry conditionality that make such assistance only contingent. This raises the question as to whether Latin America should actively pursue the effective implementation of regional arrangements capable of ensuring the availability of liquidity at times of acute financial stress. The Latin America Shadow Financial Regulatory Committee dealt with this issue by answering these questions, among others, and shared their statement publicly at this CGD event:
Should regional financial integration be further and actively enhanced? What are the sensible options?
Is a Latin American Monetary Fund desirable? Is it viable? How would it operationally work?
What are the economic and financial pre-conditions for a regional monetary fund to be operational, effective and sustainable? Does Latin America meet these conditions?
Are there incentives for cooperation among Latin American countries that can potentially overcome the sharp political divide in the region?
Liliana Rojas-Suarez, President, CLAAF; Senior Fellow, Center for Global Development Guillermo Calvo, Professor, Columbia University; Former Chief Economist, IDB Pedro Carvalho de Mello, Professor, Universidade de São Paulo; Former Commissioner of Comissão de Valores Mobiliários Brazil Guillermo Chapman, Former Minister of Planning and Economic Policy, Panama; Chairman and CEO of INDESA, Panama Roque Fernandez, Professor, Universidad del CEMA, Buenos Aires; Former Minister of Finance, Argentina Pablo Guidotti, Dean, School of Government, Universidad Torcuato di Tella; Former Vice-Minister of Finance, Argentina Guillermo Perry, Visiting Professor, Harvard Kennedy School; Former Minister of Finance, Colombia
