Sakakibara said information technology has led to massive, instantaneous shifts in international monetary flows. Once some money flows in one direction, all the money goes in one direction. There is a tendency to overshoot. Addressing this situation is a problem for all of us. Japan is studying the Latin American experience for its crisis management and quick response mechanisms, Sakakibara said, and it is closely following regional and subregional trade agreements, such as the North American Free Trade Agreement and Mercosur, which will require adjustments in trade and investment strategies.
Fiscal discipline is the rule.
President Alberto Fujimori of Peru highlighted the importance of economic cooperation between the two Pacific regions, and urged Japan to take the initiative in strengthening relations. President Julio Mar a Sanguinetti of Uruguay stressed the need for major economic powers, such as Japan to move rapidly to fix their own financial crises to prevent world contagion. Banking crises must be resolved. They are like a hemorrhage. The hemorrhage must be stopped before all else.