As the world financial system becomes increasingly integrated, crises originating in one nation are more and more likely to spill across national borders and cause more generalized financial disruption. When financial crises do occur the world official community must be prepared cooperatively to manage the financial disruption. This background essay supports the summary analysis in Turbulent Waters with a careful exposition of issues that arise in the management of financial crises, first within nations and then in wider regional and world contexts. The emphasis in the later parts of the essay is on needed enhancements in collective international management, including improvements in the contingent provision of emergency lending, in the handling of moral hazard difficulties, and in the involvement of private financial institutions in concerted lending.
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