Leading bankers from Brazil, Mexico, Chile, Argentina, Peru and Colombia met in Santiago de Chile to discuss the deepening financial crisis and how best to shield the region from its fallout. Venezuela's central bank president Gastón Parra apologized for not having participated.
The meeting followed the IMF and World Bank annual assemblies in Washington which convened the 185 member countries, to debate actions to halt the financial meltdown in major economies, possibly the worst crisis in decades.
"The word 'coordination' doesn't describe this meeting well. I think there's a spirit of collaboration and commitment to monetary and financial stability," Argentina's central bank chief, Martin Redrado, told reporters after the four-hour meeting in Chile ended.
As the global financial crisis slows economic growth worldwide, demand for Latin American commodities has begun to fall – and prices – which is the most important source of export revenue for most countries in the region. The crisis has also had an impact on the local currencies which have depreciated as investors and savers look for what they consider a safer, more liquid currency, the US dollar.
In the past, the region's economic fortunes have ebbed and flowed with prices for raw materials, but central bank chiefs said in Santiago that their economies are stronger this time around.
"We're in better shape to face the financial turbulence, thanks to solid economic fundamentals," a joint statement read.
Taking advantage of years of strong economic growth and profitable exports Many countries in the region have stockpiled foreign reserves amid years of strong economic growth and profitable exports but Brazil, Mexico and Argentina have been forced to tap these reserves in recent weeks to try to avoid a sharp depreciation of their currencies against the dollar.
Although central banks are reluctant to disclose the volume of support to their local currencies and how far they are prepared to let them slide, Mexico admitted having lost almost 10% of its reserves in the two weeks "run."
"There is no doubt that no one is immune to the crisis," said Brazilian central bank president Henrique Meirelles after the meeting at the Hyatt hotel.
The central bankers agreed to establish mechanisms to exchange information and increase cooperation as they confront the crisis, "to facilitate the determination of courses of action to follow in respective countries."
Peru's central bank chief, Julio Velarde told reporters that "the international situation is generating concern but the majority of countries in the region are in a position to use instruments to ensure that the financial system remains stable."
And Colombia's top central banker, Jose Dario Uribe, said "in different countries (in the region) we have responded to the volatilities with different policies … in the case of Colombia, we have shown great stability."
Both the World Bank and the IMF have said they are ready to provide resources to countries in need as they face the crisis. However analysts believe LatAm countries are not enthusiastic about the IMF, given past experiences and several countries of the region have paid off their IMF debts among which, Brazil, Argentina, Uruguay, Mexico, Venezuela.
Besides LatAm have other multinational institutions where to resort: the Inter American Development Bank; Latin America's Reserves Fund and the Andean Development Corporation, which have pledged US$ 9.3 billion in emergency loans to ease cash supply problems.
Some LatAm leaders also claim the crisis has exposed the double standard at the IMF whose rich country backers have managed their economies in ways that poorer borrowing countries were never allowed.
"When Brazil had problems every day the IMF was giving us tips, "do this," "do that," and where are the tips they are giving now that we have the US crisis on us? Where's the IMF? Why aren't they giving Europe tips about what to do? Simply because this is their crisis," complained Brazil's president, Luiz Inácio Lula da Silva.
Mercopress