And given the international extent of these vulnerabilities and interconnections, the crisis quickly became global. Central banks around the world responded forcefully. From the outset, the Federal Reserve vigorously used its traditional toolkit for managing short-term interest rates.
The convergence of competitiveness is needed to get the problem countries to grow again, and to return their finances to a clearly sustainable trajectory. As regards stabilization of the problem countries, it has been necessary to support their stabilization programmes via temporary financing from the other partner countries, and from the IMF.