| BUSINESSWEEK ONLINE : FEBRUARY 8, 1999 ISSUE | ||||||||
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| COVER STORY
Blueprints for Safety Ideas for reforming the ''international financial architecture'' are all over the map LENDER OF LAST RESORT Have the IMF formally assume responsibility for bailing countries out of emergencies and supplying needed liquidity before crises occur. To qualify, nations must meet financial and regulatory rules. GLOBAL OVERSIGHT The IMF or a new agency would police disclosure practices by governments, central banks, and private financial institutions. The information would be published and used by creditors to assess risk. CURBING HEDGE FUNDS Central banks would supervise big private funds that move large volumes of money across borders and share information to head off speculative attacks. SHARING THE PAIN New global bodies or procedures should arbitrate workouts so all creditors share the burden of resolving a crisis. Ideas include a global bankruptcy system or writing work- out rules into bond contracts. CAPITAL CONTROLS World Bank and other bodies suggest that developing nations restrict excessive inflows of hot money. Chile's approach of ''taxing'' short-term loans and portfolio investments is cited as a model. FIGHTING LIQUIDITY FREEZES The IMF plans more early bailouts such as the one for Brazil to avert crises. The International Finance Corp. wants to offer more emergency trade credits in case banks cut off viable exporters. BETTER COMMUNICATIONS Officials in developing countries should more openly discuss their policies and problems through conference calls with lenders and investors, a strategy now used by Mexico. DATA: IMF, WORLD BANK, IIF, BW _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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