Economic and financial authorities around the world have been preparing for any disruption to financial markets or economic activity after the start of a US-led attack on Iraq.

The following is an overview of different measures and plans:

 Asia

India: 

• The Reserve Bank of India will step in to soothe local currency and money markets if a war breaks out in Iraq. While no deatils were available about the steps that the central bank is likely to take, RBI has in the past sold dollars to prevent a sharp slide in the rupee and bought bonds to inject cash in the wake of adverse international developments.
• According to experts, India's forex reserves of over $74 billion, sufficient to pay for more than a year's imports, could cushion a short-term jump in oil prices.
• India imports 70 per cent of its crude oil needs. Every dollar rise in crude prices inflates the oil import bill by $620 million a year.

Japan:

• If the yen starts surging against the dollar, the finance ministry may intervene to support the US currency and weaken the yen. Finance Minister Masajoru Shiokawa said on March 20 his ministry was closely watching the foreign exchange market and would take decisive action to counter rapid moves.
• Shiokawa also said Japan would work with other G7 nations if the attack on Iraq caused major global economic disruption.
• The Bank of Japan has called an emergency policy board meeting on Tuesday to discuss the weak economy and the impact of war in Iraq. Analysts believe the meeting could yield monetary easing or a pledge to buy more shareholdings form banks to boost market confidence.
• Vice Finance Minister Masakazu Hayashi said on March 24 he wanted the Bank of Japan to adopt "effective easing steps" at the surprise meeting.
• The Bank of Japan injected an extra one trillion yen into the banking system on March 20 to contain any disruptions to the financial system. It has promised to "act if there is shock or widespread fear in the market" and supply emergency funds as necessary to avoid a liquidity crunch in the interbank lending market and support the banking system.
• Japan is tightening immigration controls, strengthening steps to prevent aircraft hijackings and raising its guard against the threat of nuclear, biological and chemical attacks.
• The agriculture ministry will ensure stable supplies of wheat, soy beans and animal feed, and will warn fishing vessels to leave dangerous waters, the Nihon Keizai said.

Korea:

• South Korea's central bank has said it is ready to inject cash into money markets and intervene to prop up its won currency if the war creates turbulence, though it saw no need for now to cut interest rates or release strategic oil reserves.
• South Korea has said it will introduce additional steps, including tariff cuts on oil imports, to help shield its economy from rising crude prices.

Singapore:

The Monetary Authority of Singapore has said it was ready to act during volatile periods to ensure financial market stability.

Malaysia:

Bankers expect Malaysia to raise $500 million through a global bond issue to fund an economic package next month to cushion its economy from any war impact.

Group of Seven

G7 finance ministers agreed in Paris on February 22 they could meet again rapidly if required and "were prepared to respond as appropriate," but added they had no hidden plan for dealing with the fallout of war in Iraq.

OPEC, IEA and other international energy groups

• The Organisation of Petroleum Exporting Countries said on March 20 it would make up for any oil shortage stemming from the attack, using spare output capacity to ensure supply continuity, but saw no need to pump more oil now into a saturated market.
• Paris-based International Energy Agency IEA, coordinator for emergency inventories for 26 industrialised nations, will make a decision on whether to release reserves within hours of any supply disruption. It said on March 20 there was no need to release emergency stocks after the U.S. attack on Iraq because it was confident OPEC could make up for any disruption.
• The European Commission, the EU member states and the IEA agreed on March 13 this was not the time to release stocks.

Americas

United States:

• Financial system contingency measures have improved since September 11, 2001. Authorities have taken several steps to make sure "critical infrastructure" for the financial system and markets has been protected. This includes arranging for back-up telecommunications services, additional physical protection of "critical" institutions and establishing ways for regulators communicate with each other and the financial services companies they regulate in an emergency.
• Energy Secretary Spencer Abraham said on March 14 that the United States reserved the right to release crude from its emergency stockpile unilaterally, after first consulting with the IEA. On March 20 he reiterated that the United States was ready to use its Strategic Petroleum Reserve "if needed", but said global oil supplies were "more than adequate" to compensate for any outage.
• The Bush administration is completing work on a massive spending plan to pay for the war, with its costs expected to top $75 billion and well beyond that if fighting drags on. The Senate voted on March 21 to trim $100 billion from President George W. Bush's tax-cut plans to cover war-related costs.

Europe:

European Union finance ministers and the European Central Bank said on March 20 they stood ready to act as necessary in response to the war in Iraq, but confirmed a commitment to strict budget rules and said the moderate response of markets to the start of hostilities had soothed anxious nerves.

ECB President Wim Duisenberg and EU Monetary Affairs Commissioner Pedro Solbes said they would meet again in two weeks to review the situation. Meanwhile they said in a statement: "We will monitoreconomic developments and financial markets closely and stand ready to cooperate and act as necessary. The ECB also stands ready to act if necessary."

The ECB said it was monitoring markets very carefully. "Financial markets can rely on the provision of sufficient liquidity even under exceptional circumstances."

The ECB can undertake quick refinancing auctions, similar to ones in September, 2001, to inject money into financial markets if it fears they are drying up.

European Commission/Ecofin/Eurogroup

• Euro zone finance ministers have agreed to take coordinated action if there is a prolonged rise in oil prices. They have not specified the action.
• Ministers have agreed EU member states should not take individual measures that might reduce the cost of oil. They may also agree to rule out unilateral action on taxes.
• European Monetary Affairs Commissioner Pedro Solbes said on March 20 the start of a war in Iraq was the kind of exceptional circumstance that allows EU states leeway on the rules in the Stability and Growth Pact, but urged fiscal discipline. The pact has a clause which shields countries from the automatic discipline process.
• There is growing pressure from EU member states for relaxing budgetary rules if a war seriously damages economies.

Britain:

The UK Treasury has proposed taking new powers to close the stock market in the event of terrorism. The consultation on whether such legislation is justified runs until April 25. The move would mirror powers the U.S. Securities and Exchange Commission used to close down New York stock markets.

Bank Supervisory Authorities

Banking supervisory authorities and central banks of the European Union have signed a memorandum of understanding that sets out the principles and procedures to deal with a crises. The memorandum, which is not public, was signed by 25 European authorities and closed a gap in cooperation between central banks and supervisors.

Stock Exchanges

Europe's bourses have improved security and polished their contingency plans following the events of September 11, 2001 and they feel prepared for any impact of war in Iraq.

Bourses have declined to detail security arrangements, but said procedures for handling extreme volatility in share trading have long been in place.