November 27, 2000
NOTE TO EDITORS
Financial Crises in the Emerging Markets: The Roles of the Public and Private Sectors, the latest edition of the New York Fed's Current Issues in Economics and Finance is available.
According to authors Terrence Checki and Ernest Stern, past strategies for resolving the sovereign debt crises in emerging markets no longer offer "a viable tactical blueprint for dealing with current or future crises. The central role now played by the markets in debt financing has made past solutions outdated and requires a fundamental shift in the way the international public sector thinks about and deals with unfolding crises.
With little consensus in policy circles about the best way to handle financial crises in emerging markets, Messrs. Checki and Stern outline a flexible, market-oriented approach to crisis resolution that allows for different forms of participation by the public and private sectors.
Paying careful attention to the realities of the current environment, the authors offer a strategy for crisis resolution that incorporates a number of elements:
Mr. Checki is an executive vice president of the Federal Reserve Bank of New York and head of the Banks Emerging Markets and International Affairs Group; Mr. Stern is a managing director of J.P. Morgan & Co.