Even as former Federal Reserve chairman Alan Greenspan stepped down yesterday from an unhappy experience testifying before Congress, the International Monetary Fund was stepping up to help a growing circle of nations that are being hurt by the worldwide credit crisis. \u201cFor Europe, this crisis provides a catalyst for improved cross-border coordination, and we encourage European leaders to follow up with bold steps on their recent commitment to concerted and coordinated action, to resolve this crisis swiftly,” said Alessandro Leipold, acting director of the IMF\u2019s European Department, in a statement earlier this week. In an announcement on Tuesday, the IMF said that its October Regional Economic Outlook for Europe projected that economies in the advanced European nations would stagnate in the short term, with only 1.3 percent growth expected this year and just 0.2 percent in 2009. The report noted, however, that these figures could well be worse, if not for the interventions already under way. Noting that Europe’s emerging nations are under heavy strain, the IMF said that such markets \u201cwill need to respond quickly to any shortfall in capital flows that may arise, including by using reserves and strong fiscal positions when such buffers exist. Contingency plans should be drawn up to deal with hard landings or to mitigate the adverse effects from the crisis on banks and firms.\u201d The IMF\u2019s most recent Regional Economic Outlook on Latin America, released this week, reported that although the global financial turmoil presents the region with serious downside risks, Latin American and the Caribbean are expected to show more resilience than in past crises, due to better macroeconomic fundamentals. The report urges that central banks in the region \u201cpreserve the proper and efficient functioning of financial systems by acting proactively in addressing risks from liquidity and asset quality\u201d and that they \u201cmaintain an active communication with markets on policy challenges and measures, especially on the future course of inflation, to keep inflation expectations well anchored.\u201d On Tuesday, the IMF acknowledged that it had been in discussions with Pakistani authorities about financial assistance from the fund \u201cto meet the balance of payments difficulties the country is experiencing as a result of high food and fuel prices and the global financial crisis.\u201d The amount of funding to be provided under the IMF\u2019s Emergency Financing Mechanism has not yet been determined. Also on Tuesday, the IMF announced that authorities in Belarus had requested assistance. And just today the fund announced a tentative agreement with Icelandic authorities on a $2.1 billion, two-year loan to help implement what the IMF described as \u201can ambitious economic program, which aims to restore confidence to the banking system, to stabilize the krona through strong macroeconomic policies and to help the country achieve medium-term fiscal consolidation following the collapse of its banking system.\u201d Looking at an even larger picture, the New York Times is reporting that the IMF is working to establish a credit line that would be supported by Japan and several oil-exporting nations. The IMF reportedly has about $250 billion currently available to lend. Hungary, Russia, Ukraine, Pakistan, Turkey, South Africa, Argentina, Iceland, Estonia, Latvia, Lithuania, Romania and Bulgaria are reportedly on the list of countries that are likely to seek IMF help. To add insult to injury, many of these nations are considered to have sound economic policies, and many of them were not significantly invested in the U.S. subprime mortgage-related securities that triggered the global crisis. But the general stagnation of credit has slowed these nations\u2019 foreign trade and caused their stock markets to fall.<\/p>\n","protected":false},"excerpt":{"rendered":"
Even as former Federal Reserve chairman Alan Greenspan stepped down yesterday from an unhappy experience testifying before Congress, the International Monetary Fund was stepping up to help a growing circle of nations that are being hurt by the worldwide credit crisis. \u201cFor Europe, this crisis provides a catalyst for improved cross-border coordination, and we encourage…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003877815","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n