Policymakers roundtable

Article Abstract:

Much discussion has been directed to the issues of whether or not a state requires a lender of last resort, the risk of devaluation and its effect on the banking system and the need for fiscal discipline in the wake of the Tequila Crisis of 1994-1995. An analysis of how the Argentine government handled the Tequila effect will indicate that the Argentine banking system works well and requires no major reform, but needs to increase its liquidity and to be strengthened further to handle any other potential bank runs in the future.

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Policymakers roundtable

Article Abstract:

Many views have been described regarding the effect of the Mexican crisis on Argentina. It is argued that Argentina successfully handled the trickle-down effect of the Mexican crisis because its central bank was able to accomplish two primary objectives. These goals were stability in currency value and stability of the financial system. There was no devaluation as some Wall Street investors had forecasted, nor did the country's financial system break down.

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Similar abstracts:

• Abstracts: Lessons from the Tequila Crisis for successful financial liberation. Policymakers roundtable

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