The Inter-American Development Bank proposed the creation of a global emergency loan financial mechanism to avert future financial crises in emerging economies, Xinhua News reports.
A recent IDB study on the impact of the financial crisis on Latin American and Caribbean countries indicated that emergency loans from the international community helped prevent the spread of the financial crisis in the region. The report suggested that having an “international loaner” will give emerging economies liquidity in times of crisis.
“During the period of extreme lack of liquidity in the international capital market, the opportunity of having access to the emergency resources is something highly valuable,” IDB Vice President Santiago Levy explained during the study’s launch. “This is one of the most important lessons that we have learnt from the recent world economic crisis.”