A new international institution is required to guarantee international loans, according to Mr George Soros, the billionaire financier and philanthropist. Mr Soros argues that the Asian banking crisis threatens to engulf not only international credit but also international trade. "We are on the verge of worldwide deflation," he claims, and the international financial system needs to be reformed in the face of this threat.

His proposal is that an International Credit Insurance Corporation should be established as a sister institution to the International Monetary Fund. Its purpose would be to guarantee international loans for a modest fee.