In the view of the BIS, “Given the swings of mood in these markets, the authorities might at certain times find it relatively easy and inexpensive to lock in longer-term foreign currency loans for later use. Finally, countries might then make use of the recently announced Contingent Credit Lines offered by the IMF.
In conjunction with similar private sector arrangements, this would be a joint testimonial to the soundness of the country in question and could contribute materially to the avoidance of contagion problems”. In a somewhat similar vein, Chairman Greenspan expressed a view that countries could adopt a “liquidity-at-risk” standard to manage their exposure to financial risks.