Today’s global financial crisis is unlike any other in more than three decades. Unlike the Latin American debt crisis of the 1980s, and the later Asian financial crisis, the turmoil has been exported from the US, and then western Europe, to emerging markets. Securitisation and the proliferation and global distribution of complex and opaque financial instruments mean that economies have become more interdependent. Several months ago I noted that decoupling has proven to be a myth. Now we are seeing the full force of the storms of this interconnected financial system.

After the resolution of the crises of the 1980s and 1990s, many emerging markets implemented key reforms, pursued prudent macroeconomic policies, strengthened banking and financial institutions and built up significant central bank reserves. In spite of their reforms, many of these countries have been caught in the downdraft of this credit crisis. They are the victims of financial stress that is both not of their making and is beyond their control. It could affect their real economies. The situation is deteriorating; these countries should not be left adrift. It would be imprudent to risk undermining the efforts in the Group of Seven leading industrialised countries to stabilise conditions by allowing the strains in emerging markets to evolve into an acute situation. Now is the time to act.