The role of the CCL and precautionary arrangements in crisis prevention The Contingent Credit Line (CCL) was expected to play a critical role to serve as a precautionary line of defense, reducing vulnerability and bolstering investor confidence in eligible emerging market economies.
Unlike other existing Fund facilities, the objective behind CCL was to prevent crises by making available adequate liquidity upfront to a member with sound fundamentals so as to deal with the pressure of contagion. CCL, however, has not been used by any member so far because of a number of concerns, including: (a) the entry problem - i.e.