A possible contagion is why Argentina matters

THE world is not ready for another financial crisis, but another financial crisis may be ready for the world.

OK, the odds of this are long. Still, they're not non-existent. The history of modern financial crises is that, originating in obscure corners of the financial system, they are initially ignored because they seem innocuous - and then wham!

Think Thailand in 1997: A run against the Thai baht ultimately led to crises in South Korea, Indonesia, Russia and Brazil. Or consider US "sub-prime" mortgages: In 2008, they triggered a collapse of global credit markets. Or recall Greece in 2010: Its debt threatened the very existence of the euro.

The action these days involves Argentina. It has suffered a sudden loss of confidence. Since mid-April, its currency, the peso, has lost about 12 per cent of its value against the dollar. To stem the panic - that is, to convince investors not to sell pesos for dollars - Argentina's central bank has raised intere…