Pre-emptive measures

An interesting trial balloon that these officials hope won't turn reflexive on them.

(Bloomberg) South American finance officials are considering creating a $10 billion to $20 billion emergency fund to assist nations that experience capital flight should the global economic crisis deepen, two government officials involved in the talks said.
The proposed fund, a regional alternative to the International Monetary Fund, will be discussed by central bank presidents and finance ministers from the 12-member Union of South America Nations at a meeting tomorrow in Buenos Aires, said the officials, who serve in separate governments and who declined to be named because talks are ongoing.
The fund would be modeled on the Bogota-based Fondo Latinoamericano de Reservas, they said. Known as FLAR, the $4 billion fund pools foreign currency reserves from five Andean nation plus Costa Rica and Uruguay to help member nations that run into balance of payment problems during times of crisis.
Regional finance ministers met Aug. 5 in Lima at the urging of Colombian President Juan Manuel Santos to discuss ways to protect their economies and the value of their record $700 billion in foreign currency reserves from a deteriorating U.S. and European economic outlook.
Among the options debated at that meeting, which was attended by Brazilian Finance Minister Guido Mantega and his counterparts from Argentina and Colombia, was a strengthening of the FLAR by boosting its membership and raising new capital, Peruvian Finance Minister Luis Miguel Castilla told reporters.