Capital flows to emerging markets are at neck choking levels as the financial crisis in the advanced countries risk starving the supply of financial aid to the developing world, an association of large banks warned on Tuesday.

Bill Rhodes, a senior Citigroup executive who is Vice chairman of the Institute for International finance (IIF), called on the International Monetary Fund to intensify its efforts to supply liquidity to emerging markets by extending the duration of the current facility from three month to more than a year. “The IMF’s resources needs to be expanded and its approaches modified to provide financing to emerging markets that have been caught in a crisis not of their making.

The IIF estimates emerging market institutions will need to refinance about $20bn a month in the first half of 2009, but the current supply of credit covers only half that. The IFF’s forecast is a sharp reduction from only four months ago, when it forecasted net capital flows to emerging markets for 2009 $562bn. The institute also scaled back its figure for 2008 to $466bbn from $619bn, illustrating the financial market turmoil.

The sharp contraction in the supply of capital is likely to be from commercial banks, which underscores the link between emerging markets and rich economies.