Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

I would hope that initiating these swaps would reduce the probability of bad outcomes in the emerging market economies. Certainly, if Brazil, Mexico, and Korea are up against the ropes and experiencing significant financial stresses, my sense is that it would be an environment in which many other EMEs would be experiencing negative spillovers. So to the extent that we can backstop these major linchpins in the emerging market world, I see that as having very positive effects for others. That would be one point. Second, the decision as to how to handle Chile, if Chile comes to us for a swap line, I think is very much a policy decision for the Committee to determine. As I said in the remarks, we as staff members would very much appreciate some sort of signal from you as to whether you want to say four and that’s all we’re willing to do, and everyone else—Chile, India, and South Africa—goes to the Fund? Or is the Committee open to having potentially a few other large, important emerging market economies have swap lines with the Federal Reserve? I see that as being a policy decision.

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