South American finance leaders want crisis fund

The Union of South American Nations has proposed establishing a fund to serve as a regional response to international financial crises, Argentina's Minister of Economy Amado Boudou, said Friday."We are working on setting up a counter-cyclical regional fund that would confront a financial crisis," said the minister in Buenos Aires, where economic and finance ministers from 12 South American countries are meeting.The fund could draw from monetary reserves or central banks from countries in the region, which manage some $500 billion, according to the Economic Commission for Latin America and the Caribbean. The funds would possibly be an extension of the Latin-American Reserve Funds (FLAR), which already serves as an assistance mechanism to its seven-member countries in case of financial turmoil.Created in 1978, FLAR brings together Bolivia, Colombia, Costa Rica, Ecuador, Peru, Uruguay and Venezuela. The two largest economies in the region, Brazil and Argentina, could increase the funds' effectiveness if they decide to join.In recent days, stocks and financial markets around the globe weakened with the double threat of a US recession and the European debt crisis.South American countries, spared for the moment, fear they will eventually feel the consequences, such as an eventual loss of competitiveness if their currency rises rapidly against the dollar.