Global financial crises and reforms : cases and caveats

xxiv, 413 p

ill

24 cm

Routledge studies in the modern world economy ; 27

Includes bibliographical references and index

Book Cover; Title; Contents; List of figures; List of tables; Acknowledgments; List of contributors; Preface; Introduction B. N. GHOSH; Causes and correlates; The twin crises: the causes of banking and balance-of-payments problems GRACIELA L. KAMINSKY AND CARMEN M. REINHART; The Asian currency crisis: a fait accompli? OBIYATHULLA ISMATH BACHA; Financial crisis in the MIT countries: myths and realities B. N. GHOSH; Japanese banking problems: implications for Southeast Asia JOE PEEK AND ERIC S. ROSENGREN; Cases and caveats; Indonesia: the long road to recovery STEVEN RADELET

The Malaysian currency crisis: capital flows, policy response and macroeconomic vulnerability ANITA DORAISAMISpeculative attack theory and currency crisis in Korea CHANGKYU CHOI; Banking crisis in Mexico LEONARDO TORRE; Capital flows and economic policy in Brazil NICOLA TINGAS AND PAULO PEREIRA MIGUEL; The yen that is too strong: a note on Japanese crisis MASATO KAWANISHI; Lessons from the Asian financial crisis STEVEN RADELET AND JEFFREY SACHS; Crisis management and reforms; The Asian model, the miracle, the crisis and the fund JEFFREY A. FRANKEL

Financial crises and reforms: towards an assessment of the emerging international financial architecture PAOLA MONTISustainability, vulnerability, and risk management PETER CORNELIUS AND KLAUS SCHWAB; Should capital controls be banished? RICHARD N. COOPER; Index

Machine generated contents note: Introduction 1 -- B. N. GHOSH --PART I -- Causes and correlates 7 -- 1 The twin crises: the causes of banking and balance-of-payments problems 9 -- GRACIELA L. KAMINSKY AND CARMEN M. REINHART -- Introduction 9 -- The links between banking and currency crises 11 -- The macroeconomic background of the crises 18 -- The anatomy of crises 27 -- Final remarks 35 -- 2 The Asian currency crisis: afait accompli? 48 -- OBIYATHULLA ISMATH BACHA -- Introduction 48 -- Objective and motivation 48 -- Literature review 49 -- What went wrong in East Asia 52 -- Monetary policy: rapid expansion 55 -- Vulnerability, herd behavior and self-fulfilling crises 65 -- Conclusion 70 -- 3 Financial crisis in the MIT countries: myths and realities 77 -- B. N. GHOSH -- Introduction 77 -- Myths and realities 78 -- Speculative attack: which model to apply? 91 -- Systemic implications of the crisis 94 -- Concluding observations 97 -- 4 Japanese banking problems: implications for Southeast Asia 102 -- JOE PEEK AND ERIC S. ROSENGREN -- Introduction 102 -- Recent trends in the global operations of Japanese banks 103 -- Patterns in Japanese lending in Southeast Asia 108 -- Impact of Southeast Asian loans on problems at Japanese Banks 115 -- Were Japanese bank lending patterns different from -- those of the US and European banks? 117 -- Southeast Asian penetration by Japanese banks 120 -- Conclusion 123 --PART II -- Cases and caveats 127 -- 5 Indonesia: the long road to recovery 129 -- STEVEN RADELET -- Introduction 129 -- A brief economic history 130 Emerging vulnerabilities 131 -- Crisis management 136 -- From economic crisis to political upheaval 146 -- The economic situation in early 1999 147 -- 6 The Malaysian currency crisis: capital flows, policy response and macroeconomic vulnerability 157 -- ANITA DORAISAMI -- Introduction 157 -- The magnitude and composition of capital flows 159 -- Policy response to capitalflows and macroeconomic impacts 160 -- The impacts of foreign direct investment 166 -- Fiscal policy and external debt 169 -- Conclusion 179 -- 7 Speculative attack theory and currency crisis in Korea 183 -- CHANGKYU CHOI -- Introduction 183 -- Theories of currency crises 184 -- Causes of the currency crisis in Korea and policy tasks 190 -- Policy to prevent a future crisis 202 -- Conclusion 203 -- 8 Banking crisis in Mexico 213 -- LEONARDO TORRE -- Introduction 213 -- Credit expansion in Mexico: 1988-94 213 -- The path to the crisis 217 -- The crisis and options for the government 221 -- Results of the rescue program 228 -- Final comments 235 -- 9 Capital flows and economic policy in Brazil 240 -- NICOLA TINGAS AND PAULO PEREIRA MIGUEL -- Introduction 240 -- Capital flows to Latin America and economic policy choices 241 -- The Brazilian experience in the 1990s: economic policy -- and capitalflows 244 -- Free floating, panic andfaster than expected recovery 262 -- Perspectives after thefloating of the exchange rate 268 -- Conclusion 279 -- 10 The yen that is too strong: a note on Japanese crisis 284 -- MASATO KAWANISHI -- Introduction 284 -- Bubble economy 284 -- Bubble burst 285 -- Prolonged stagnation 286 -- Update 290 -- The yen that is too strong 290 -- 11 Lessons from the Asian financial crisis 295 -- STEVEN RADELET AND JEFFREY SACHS -- Introduction 295 -- The origins of the crisis 296

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