The essence of the recent financial crisis is that international bank loans flew into the emerging markets during the years 1993 96, only to flee these same markets in 1997 and after.

Soon a squeeze of a different type will be put on the West, as the Kremlin bids for new international loans.

Second, international banks that had been lending to South America abruptly withdrew their funding in the second half of 1998.

Big international banks pour in lots of short term capital into a region, and then suddenly pull the plug, demanding immediate repayments, and being unwilling to roll over the credits.

Credit tightened sharply.

Losses are spreading from sub prime to near prime and prime mortgages, commercial mortgages, and unsecured consumer credit (credit cards, auto loans, student loans).

By contrast, in the US, a much larger proportion of investment is financed by issuing bonds, which can have a longer maturity than bank loans.

Are bank managers ignorant?

Some have had their financial assets frozen.

It's also good with credit.

Given that many of them have international bank accounts in US dollars, they are liable to American prosecution.

International agencies such as the World Bank and the IMF would automatically stop making loans to countries where the head of government exceeds that limit.

Similarly, with bank credit to the private sector in the new members well below averages in the West, the scope for increasing lending activity is also substantial.

But today s situation shares two features with the earlier episodes of financial euphoria over Latin America sky high commodity prices and cheap international money.

The IMF learned this the hard way in the 1980s, when it transferred bad bank loans to Latin American governments onto its own books and those of other governments.

The Fed has printed new bank reserves with reckless abandon.

Bank services are getting more and more expensive.

Tom cleaned out his bank accounts and disappeared.

Recent short term bank lending from Tokyo, New York, Frankfurt, and London to East Asian banks and businesses are an example of how financial integration and deregulation made fixed exchange rates vulnerable.

Pawning jewellery is not merely a fast way to land cash S 1,300 in Ms Amirthalinga's case but almost as cheap as unsecured bank loans.

Panic ensued and credit stopped circulating.

Consider international institutions.

Other international agreements

Will bank stocks once again outperform the market?

National banking systems need a lender of last resort.

Their consequent reluctance to lend constrains investment.

Thailand, for instance, established the Bangkok International Banking Facilities in the hope of becoming a regional financial center, despite the fact that local financial institutions were ill prepared to handle massive flows of capital.

Banks magnify the boom by making credit too easily available, and they exacerbate the bust by withdrawing it too abruptly.

Pinjaman Tiongkok kepada Brasil hampir sebesar 1 PDB nya, sementara pinjaman yang diterima Meksiko relatif kecil (lihat grafik).

Global Institutions after the Crisis

The International Consequences of 1989

International Norms in Cyberspace

Seminars and international meetings

International calls for dialogue

Not possible to talk when receiving an international call.

International observers counted up the ballot.

М. Международные отношения, 2004.

To be sure, some domestic banks continue to provide credit.

But when the entire international system becomes entwined with an excessive amount of short term inter bank lending, the world economy becomes subject to financial panic.

Its credits and swaps have never been activated.

Moreover, mortgages are usually securitized.

Short term inter bank loans are seemingly less risky than long term lending.

According to Valery Bogdanov, chairman of the Public Council at the Directorate of the Federal Marshals Service of Russia for the Republic of Kalmykia, practically every citizen in the region owes back debt on utility bills, traffic police fines, bank loans, and other forms of credit, and no one is immune from unforeseen situations.

We need international institutions that work.

International norms tend to develop slowly.