FROM THE OFFICE OF PUBLIC AFFAIRS

We welcome the new facility put in place yesterday by the International Monetary Fund, which is being used today to provide a further tranche of the resources supporting its program for South Korea.

The Supplemental Reserve Facility provides the IMF with a new tool to deal with 21st century financial crises. By combining market interest rates with short maturities, this facility is designed to maximize the incentive for a quick return by governments to reliance on private market financing. It will be available only in carefully circumscribed situations and only in association with the strong policy response necessary to restore confidence.

This is an important step to strengthen the international community's ability to deal with the types of financing problems that can arise in today's global financial markets, where flows are on a much larger scale than could be conceived a decade ago and are more sensitive to shifts in perception.

The United States played an active part in developing this initiative, which was endorsed in Manila by Asian finance officials and by the APEC leaders at their summit meeting in Vancouver last month with the strong support of President Clinton.