Planet Money The obscure pool of money the US used to bail out Argentina
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Nov 15, 2025 
Brad Setzer, a senior fellow at the Council on Foreign Relations, and Jeffrey Schaefer, former Assistant Secretary of the Treasury, dive into the U.S. Treasury's remarkable $20 billion loan to Argentina. They explore the mysterious Exchange Stabilization Fund, its historical context, and its unique authority that bypasses Congressional approval. With insights from the 1995 Mexico bailout, they predict how Argentina's troubled economic landscape might mirror past crises. The conversation raises questions about the effectiveness of such financial interventions.
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Exchange Stabilization Fund Powers
- The Exchange Stabilization Fund is a Treasury 'private slush fund' created 90 years ago to stabilize exchange rates.
- It gives the Treasury fast, unilateral authority to act without Congress in currency emergencies.
1995 Mexico Rescue Precedent
- In 1995 the ESF was used to offer Mexico a $20 billion loan during a peso crisis.
- That single, high-profile use provides a practical precedent for the Argentina action.
Treasury Responded To Mexico's Run
- Jeffrey Schaefer recounted Treasury's fast mobilization when Mexico ran out of dollars in 1994–95.
- The crisis forced Mexico to stop propping up the peso and triggered urgent talks in Washington.