ABSTRACT
Emerging markets have experienced a long succession of crises in the past seven years, posing major challenges for international policy. Eight major financial crises (Mexico 1995; Thailand, Indonesia and South Korea 1997; Russia 1998; Brazil 1999; Argentina and Turkey 2001) and four notable minor ones (Ecuador, Pakistan and Ukraine 1999-2000; Uruguay 2002) have affected economies accounting for about 52 per cent of total external debt of emerging market economies.2 Credit markets have gone from boom to bust in terms of aggregate net lending, although direct investment has held up relatively well and, for a number of sovereigns, market access has remained intact, while for other important borrowers it has been restored.
