Therefore, it took a while before there was any recognition that there was a longer-run problem on the fiscal side. The recognition lag was exacerbated by an unexpected decline in the trend rate of productivity growth, now dated at around 1973, and a rise in the actual real interest rate to some longer-run equilibrium that occurred sometime in the early 1980s.
Activating them is acceptable now only as a ‘precautionary’ agreement because of Brazil’s special role for the stability of the global financial markets. Funding through the BIS must not become standard practice either. IMF programmes should, as a matter of policy, be funded by the IMF.