The Asian Financial Crisis: Causes, Cures, and Systemic Implications / Edition 1

by Morris Goldstein

Overview

The turmoil that rocked Asian markets after the middle of 1997 and that spread far afield was the third major currency crisis of the 1990s. Thailand, Indonesia, Malaysia, and South Korea suffered outright recessions in 1998. In an effort to contain the crisis, almost $120 billion was pledged in IMF-led official rescue packages. How could this happen to a group of countries that has been so highly regarded in the 1990's by private international capital markets? How could the crisis be overcome, and what changes are necessary to prevent it from happening again?

Morris Goldstein provides the answers to these questions by first explaining how the Asian financial crisis arose and spread. He traces the crisis through its three interrelated origins: financial sector weaknesses; external sector problems; and the contagion that spread from Thailand to other countries. Goldstein then outlines what needed to be done in the ASEAN-4 economies, in Japan and China, and in the design of IMF-led official rescue packages to end the crisis. Goldstein's final remarks offer specific proposals for improving the international financial architecture.

Product Details

ISBN-13:	9780881322613
Publisher:	Peterson Institute for International Economics
Publication date:	06/01/1998
Series:	Policy Analyses in International Economics , #55
Edition description:	New Edition
Pages:	100
Product dimensions:	6.00(w) x 9.00(h) x (d)
Age Range:	18 Years

About the Author

Morris Goldstein, nonresident senior fellow, has held several senior staff positions at the International Monetary Fund (1970–94), including Deputy Director of its Research Department (1987–94). From 1994 to 2010, he held the Dennis Weatherstone Senior Fellow position at the Peterson Institute. He has written extensively on international economic policy and on international capital markets.

Table of Contents

	Preface	vii
	Acknowledgments	xi
1	Introduction	1
2	Origins of the Crisis	7
	Financial-Sector Weaknesses	7
	External-Sector Problems	14
	Contagion	17
3	How to Fix It	23
	Restructuring and Reform of Financial Sectors and Prudential Oversight in the ASEAN-4 Economies and South Korea	23
	Exchange Rate Policies in Asia and Trade Policies in the G-7	26
	Japan's Role	28
	China's Role	30
	IMF Rescue Packages	31
4	Halifax II Reforms	45
	Moral Hazard and Debt Rescheduling	46
	Prudential/Supervisory Standards	53
	Transparency and Disclosure in International Financial Markets	57
	IMF Surveillance	59
	Risk Management in Global Financial Institutions	62
5	Lessons of the Asian Crisis and Concluding Remarks	65
Appendix	List of Core Principles for Effective Banking Supervision	69
	References	73

What People are Saying About This

Frederic S. Mishkin

A first-rate piece of work...an excellent and comprehensive discussion of why the Asian crisis occurred and what would be the appropriate policy responses.
-- Barton Hepburn Professor of Economics, Graduate School of Business, Columbia University

Editorial Reviews

A first rate piece of work... an excellent and comprehensive discussion of why the Asian crisis occurred and what would be the appropriate policy responses.

Frederic S. Mishkin