Despite the progress made, the failure to act in a resolute and timely manner, along with the recession, resulted in a worsening of the dynamics of public debt, making a new agreement for financial support necessary. The new loan agreement and the economic adjustment programme provide more favourable conditions than before for a return to growth.
2  BIS Review 47/2009  Interestingly, it is significant that the recent financial crisis, caused primarily due to the huge official capital flows into the rich industrial countries, especially the USA, affected, first and foremost, the USA and other advanced industrial countries with full capital account convertibility rather than EMEs; it affected EMEs as well but only as “an effect” through the transmission channel of capital account, quite unlike the previous ones like Latin American, Russian, East Asian crisis, where these countries were originally affected because of macro economic imbalances manifesting through capital account.