WASHINGTON. May 4:.Latin American economies are beginning to stabilise and the 'sense of crisis has abated." Deputy US Treasurer Lawrence Summers said here yesterday, reports AFP.

But Summers, in remarks to the Council of the Americas, warned regional authorities not to jeopardise the recovery by failing to stick to sound economic policies aimed at preventing future turmoil.

Echoing a statement issued last week by finance ministers and central bankers from the leading developed nations, Summers said global prospects had also improved in the last six months, reflecting better performances in emerging markets and growth-oriented policies in the industrialized world.

"But nowhere more than in Latin America, the ebbs and flows of global sentiment usually shift more quickly than the ground beneath." he said. 'The sense of crisis has abated. But major challenges remain."

Summers urged Latin Amer-

ican policy makers not to waste the opportunity to reform their markets, warning that failure to do so would "quickly squander" the confidence that investors have regained in their economies.

"In countries where sound policies are not yet in place, particularly Ecuador, policymakers will need to remember that a rising regional tide, in itself, will do little to stop rising inflation, widening fiscal deficits and crisis in the financial system.

"Problems that were home-grown need to be fixed at home." he said.

Summers urged the Brazilian government to show "continued vigilance" in meeting its short-term macroeconomic targets and advised Venezuela to ensure that the new capital flowing into the country is sustainable over the long run.

In Mexico and Argentina, he said, it was important that work continue on "strong policies that can withstand the vagaries of the electoral cycle."