BBC reports that the IMF is reactivating some of the emergency mechanisms used during the 1997 Asian crisis to help support countries suffering from capital flight. The story is a bit thin on particulars; we’ll provide an update should they surface later today.
From the BBC (hat tip reader Saboor):
The International Monetary Fund (IMF) has activated an emergency finance mechanism to help countries hit by the financial crisis.
IMF chief Dominique Strauss-Khan said the lending procedure would allow the IMF to react quickly to support countries facing funding problems.
The scheme, which was used during the Asian financial crisis in 1997, will help speed up approval of loans….
Speaking ahead of meetings of the IMF and World Bank, Mr Strauss-Khan urged countries to act “quickly, forcefully, and co-operatively” to solve the global economic problems…But he issued a stark warning against countries acting unilaterally to fight the crisis, referring to recent isolated moves by certain European Union member countries.
“There is no domestic solution to a crisis like this one.”
Mr Strauss-Khan said the events of the past few weeks were beginning to take their toll on emerging economies as credit lines were cut and as trade was being hit by slowing demand in Western economies.
He said the IMF was ready to assist any country in need of funding through its emergency aid mechanism, set up in 1995 to help Mexico stabilise its financial system after a crisis of confidence that led to sharp declines in the country’s currency.
The Philippines, Thailand, Korea and Indonesia also drew on the mechanism to access billions of dollars of loans after the eruption of the Asian financial crisis in 1997..