A model of the domestic financial intermediation of foreign capital inflows based on agency costs is developed for studying financial crises in emerging markets. In equilibrium, the banking system becomes progressively more fragile under imperfect prudential regulation and public sector loan...

The recent financial crises in emerging markets have motivated a number of proposed measures that might regulate or provide protection against readily reversible external capital flows. Possible reforms include the adoption of self-protection policies by developing countries that augment...

This paper examines the motivation for, and the success of, regional efforts in Asia to promote local currency bond markets. The analysis demonstrates that Asian local currency bond markets made substantial gains as a region going into the current global financial crisis. However, we argue that...