The International Monetary Fund is reportedly considering a plan to have industrial countries bail out investors in risky emerging markets when things go badly. These are the same markets in which, when things go well, they go very, very well for investors.

• Recalling the peso crisis in Mexico, the IMF wants to have a $28 billion line of credit by the end of January to deal with currency runs.

• Critics say the $50 billion U.S. and IMF rescue package cobbled together at the time allowed Mexican politicians to get off the hook and avoid selling Pemex -- the state-owned oil company -- to pay its creditors.

• The bail-out benefited foreign owners of Mexican debt -- chiefly American bond funds and currency speculators.

• Meanwhile, Mexican workers and their families saw the value of their savings and wages drop by more than 40 percent practically overnight.

Critics find the IMF's assurances -- that the funds it seeks will keep other countries from following Mexico's course and that it will only draw on the funds in cases of dire need -- hard to believe.

Source: Perspective, "Moral Hazard," Investor's Business Daily, January 6, 1997.