Meanwhile, EMEs that are at the receiving end of global financial turbulence are systematically denied access. The time has come to end this sectarian approach and the access to swap lines be equally available. While EMEs have shown a degree of resilience to the turmoil of recent years, they are vulnerable to liquidity and bridge financing gaps that are transitory but debilitating.
Access to swap lines will help them manage these risks better and prevent them from assuming systemic proportions, thereby threatening global financial stability. We must learn from the lessons of the global financial crisis and act expeditiously and comprehensively to establish a broader swap network. In its absence, the macroeconomic environment of each country will inform the choice of policy instruments.