Global leaders <3 the IMF, but Brazil?
October 26, 2008
Didn’t see this story until after I had posted earlier today. The lede from the Guardian:
Asian and European leaders today called for more international regulation and a stronger role for the International Monetary Fund in response to the worst financial crisis since the 1930s.
No surprise there. All the questions I outline in my post below still apply.
Meanwhile, the story goes on to include at least the second mention I’ve seen that Brazil is considering going to the IMF for funds in response to the crisis.
The problem is there is no attribution for this assertion, which (if it were true) would constitute a major about-face for the Lula government and a big news item in Latin America’s most populous nation and most globally integrated economy.
So, did the author just make it up? I don’t know, but I can’t find any evidence to support his claim in the financial section of Brazil’s most reputable paper, the Folha de Sao Paulo. Similarly, other English language publications, such as the Christian Science Monitor, have run stories suggesting that Brazil is among the best prepared countries to weather the crisis in terms of its cash reserves.
Given the sensitivity of global markets right now, I hope the Guardian editors will consider investigating this rumor before it gets out of control. Bond rating agencies read this kind of stuff and they won’t like it even if it is just an irresponsible slip.