Crisis and Contagion in East Asia : Nine Lessons
The authors investigate the origins of the East Asian crisis and its contagion, examine the channels of contagion, and discuss policy recommendationsThey make detailed recommendations in the context of nine general lessons learned from the East Asi...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/06/1346344/crisis-contagion-east-asia-nine-lessons http://hdl.handle.net/10986/19635 |
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okr-10986-19635 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ADB AGGREGATE DEMAND ASSET PRICE BUBBLES ASSETS BALANCE OF PAYMENTS BALANCE SHEETS BANK DEPOSITS BANK EXPOSURE BANK LIABILITIES BANK LOANS BANK OF KOREA BANK OF THAILAND BANKING CRISES BANKING SECTOR BOND MARKETS BORROWING CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL CONTROLS CAPITAL FLIGHT CAPITAL FLOWS CAPITAL GAINS CAPITAL INFLOWS CAPITAL MARKETS CAPITAL OUTFLOWS CD CENTRAL BANK CENTRAL BANKS COMMERCIAL BANKS COMPETITIVENESS CONTAGION CONTINGENT LIABILITIES CORPORATE FINANCE CORPORATE SECTOR CREDIT BOOM CREDIT EXPANSION CURRENCY BOARD CURRENCY CRISES CURRENCY CRISIS CURRENCY DEVALUATIONS CURRENCY RISK CURRENT ACCOUNT CURRENT ACCOUNT DEFICITS DEBT DEBT CRISIS DEFICITS DEMAND DEPOSITS DENOMINATED LOANS DEPOSITORS DEVALUATION DEVELOPMENT ECONOMICS DOLLAR TERMS DOMESTIC BANKS DOMESTIC CREDIT DOMESTIC FINANCIAL INTERMEDIATION DOMESTIC FINANCIAL MARKETS DOMESTIC FINANCIAL SYSTEMS DOMESTIC INVESTORS DOMESTIC LIQUIDITY DOMESTIC POLICIES ECONOMIC BOOM EMERGING MARKET ECONOMIES EMERGING MARKETS EXCHANGE RATE EXCHANGE RATE REGIME EXCHANGE RATES EXPORT GROWTH EXPORTS EXTERNAL BORROWING EXTERNAL DEBT EXTERNAL FINANCE EXTERNAL SHOCKS FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF NEW YORK FINANCE COMPANIES FINANCIAL ASSETS FINANCIAL CONTAGION FINANCIAL CRISES FINANCIAL DISTRESS FINANCIAL GLOBALIZATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REPORTING FINANCIAL SECTOR FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL VOLATILITY FISCAL POLICY FOREIGN ASSETS FOREIGN BANKS FOREIGN BORROWING FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE MARKETS FOREIGN INVESTORS FOREIGN MARKETS FORWARD COMMITMENTS GDP GLOBALIZATION GOVERNMENT DEBT GOVERNMENT GUARANTEES HEDGE FUNDS HONG KONG MONETARY AUTHORITY INCOME GROUPS INTERDEPENDENCE INTEREST RATE POLICY INTEREST RATES INTERNATIONAL BANKING INTERNATIONAL BANKING FACILITY INTERNATIONAL CAPITAL INTERNATIONAL FINANCIAL ARCHITECTURE INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL RESERVES LIQUID MARKETS LIQUIDITY LIQUIDITY SUPPORT LOCAL CURRENCY LOOTING LOW INTEREST M2 MACROECONOMIC IMBALANCES MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMICS MERCHANT BANKS MONETARY AGGREGATES MONEY MARKET MONEY SUPPLY MULTIPLE EQUILIBRIA MUTUAL FUND NOMINAL INTEREST RATE OFFSHORE BANKING PORTFOLIOS PRICE DECLINES PRIVATE BANKS PRIVATE EXTERNAL DEBT PRIVATE SECTOR PRODUCTIVITY RECESSION RISK FACTORS RISK TAKING SAVINGS SAVINGS DEPOSITS SHORT TERM DEBT STOCK MARKET STOCK MARKET PRICES STOCK MARKETS STOCK PRICES SUPERVISORY AUTHORITIES TRADING TRANSPARENCY |
| spellingShingle |
ADB AGGREGATE DEMAND ASSET PRICE BUBBLES ASSETS BALANCE OF PAYMENTS BALANCE SHEETS BANK DEPOSITS BANK EXPOSURE BANK LIABILITIES BANK LOANS BANK OF KOREA BANK OF THAILAND BANKING CRISES BANKING SECTOR BOND MARKETS BORROWING CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL CONTROLS CAPITAL FLIGHT CAPITAL FLOWS CAPITAL GAINS CAPITAL INFLOWS CAPITAL MARKETS CAPITAL OUTFLOWS CD CENTRAL BANK CENTRAL BANKS COMMERCIAL BANKS COMPETITIVENESS CONTAGION CONTINGENT LIABILITIES CORPORATE FINANCE CORPORATE SECTOR CREDIT BOOM CREDIT EXPANSION CURRENCY BOARD CURRENCY CRISES CURRENCY CRISIS CURRENCY DEVALUATIONS CURRENCY RISK CURRENT ACCOUNT CURRENT ACCOUNT DEFICITS DEBT DEBT CRISIS DEFICITS DEMAND DEPOSITS DENOMINATED LOANS DEPOSITORS DEVALUATION DEVELOPMENT ECONOMICS DOLLAR TERMS DOMESTIC BANKS DOMESTIC CREDIT DOMESTIC FINANCIAL INTERMEDIATION DOMESTIC FINANCIAL MARKETS DOMESTIC FINANCIAL SYSTEMS DOMESTIC INVESTORS DOMESTIC LIQUIDITY DOMESTIC POLICIES ECONOMIC BOOM EMERGING MARKET ECONOMIES EMERGING MARKETS EXCHANGE RATE EXCHANGE RATE REGIME EXCHANGE RATES EXPORT GROWTH EXPORTS EXTERNAL BORROWING EXTERNAL DEBT EXTERNAL FINANCE EXTERNAL SHOCKS FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF NEW YORK FINANCE COMPANIES FINANCIAL ASSETS FINANCIAL CONTAGION FINANCIAL CRISES FINANCIAL DISTRESS FINANCIAL GLOBALIZATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REPORTING FINANCIAL SECTOR FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL VOLATILITY FISCAL POLICY FOREIGN ASSETS FOREIGN BANKS FOREIGN BORROWING FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE MARKETS FOREIGN INVESTORS FOREIGN MARKETS FORWARD COMMITMENTS GDP GLOBALIZATION GOVERNMENT DEBT GOVERNMENT GUARANTEES HEDGE FUNDS HONG KONG MONETARY AUTHORITY INCOME GROUPS INTERDEPENDENCE INTEREST RATE POLICY INTEREST RATES INTERNATIONAL BANKING INTERNATIONAL BANKING FACILITY INTERNATIONAL CAPITAL INTERNATIONAL FINANCIAL ARCHITECTURE INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL RESERVES LIQUID MARKETS LIQUIDITY LIQUIDITY SUPPORT LOCAL CURRENCY LOOTING LOW INTEREST M2 MACROECONOMIC IMBALANCES MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMICS MERCHANT BANKS MONETARY AGGREGATES MONEY MARKET MONEY SUPPLY MULTIPLE EQUILIBRIA MUTUAL FUND NOMINAL INTEREST RATE OFFSHORE BANKING PORTFOLIOS PRICE DECLINES PRIVATE BANKS PRIVATE EXTERNAL DEBT PRIVATE SECTOR PRODUCTIVITY RECESSION RISK FACTORS RISK TAKING SAVINGS SAVINGS DEPOSITS SHORT TERM DEBT STOCK MARKET STOCK MARKET PRICES STOCK MARKETS STOCK PRICES SUPERVISORY AUTHORITIES TRADING TRANSPARENCY Kawai, Masahiro Newfarmer, Richard Schmukler, Sergio L. Crisis and Contagion in East Asia : Nine Lessons |
| geographic_facet |
East Asia and Pacific |
| relation |
Policy Research Working Paper;No. 2610 |
| description |
The authors investigate the origins of
the East Asian crisis and its contagion, examine the
channels of contagion, and discuss policy
recommendationsThey make detailed recommendations in the
context of nine general lessons learned from the East Asian
crisis. 1) Preventing crises and contagion: avoid large
current account deficits financed through short-term private
capital inflows. Aggressively regulate and supervise
financial systems to ensure that banks and nonbank financial
institutions manage risks prudently. Put in place incentives
for sound corporate finance to prevent high leverage ratios
and overreliance on foreign borrowing. 2) Managing crises
and contagion: In the context of sound policies, mobilize
timely external liquidity of sufficient magnitude to restore
market confidence. At times of crisis, "bail in"
private foreign creditors. When official resources are too
limited for the magnitude of the crisis or contagion, and
when private creditors are not amenable to coordination,
some involuntary private involvement may be needed too. Keep
in mind that there is no one-size-fits-all monetary and
fiscal stance for responding to crises and contagion. 3)
Resolving the systemic consequences of crises and contagion.
Move swiftly to establish domestic and international
mechanisms for dealing with the assets and liabilities on
nonviolable banks and corporations. Cushion the effects of
crisis on low-income groups through social policies to
ameliorate the inevitable social tensions associated with
adjustment. 4) Developing an effective regional financial
architecture. Improve mechanisms for preventing, managing,
and resolving crises and contagion at the regional level in
ways consistent with improvements in the global financial architecture. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Kawai, Masahiro Newfarmer, Richard Schmukler, Sergio L. |
| author_facet |
Kawai, Masahiro Newfarmer, Richard Schmukler, Sergio L. |
| author_sort |
Kawai, Masahiro |
| title |
Crisis and Contagion in East Asia : Nine Lessons |
| title_short |
Crisis and Contagion in East Asia : Nine Lessons |
| title_full |
Crisis and Contagion in East Asia : Nine Lessons |
| title_fullStr |
Crisis and Contagion in East Asia : Nine Lessons |
| title_full_unstemmed |
Crisis and Contagion in East Asia : Nine Lessons |
| title_sort |
crisis and contagion in east asia : nine lessons |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/06/1346344/crisis-contagion-east-asia-nine-lessons http://hdl.handle.net/10986/19635 |
| _version_ |
1764440173669515264 |
| spelling |
okr-10986-196352021-04-23T14:03:43Z Crisis and Contagion in East Asia : Nine Lessons Kawai, Masahiro Newfarmer, Richard Schmukler, Sergio L. ADB AGGREGATE DEMAND ASSET PRICE BUBBLES ASSETS BALANCE OF PAYMENTS BALANCE SHEETS BANK DEPOSITS BANK EXPOSURE BANK LIABILITIES BANK LOANS BANK OF KOREA BANK OF THAILAND BANKING CRISES BANKING SECTOR BOND MARKETS BORROWING CAPITAL ACCOUNT CAPITAL ACCOUNT LIBERALIZATION CAPITAL CONTROLS CAPITAL FLIGHT CAPITAL FLOWS CAPITAL GAINS CAPITAL INFLOWS CAPITAL MARKETS CAPITAL OUTFLOWS CD CENTRAL BANK CENTRAL BANKS COMMERCIAL BANKS COMPETITIVENESS CONTAGION CONTINGENT LIABILITIES CORPORATE FINANCE CORPORATE SECTOR CREDIT BOOM CREDIT EXPANSION CURRENCY BOARD CURRENCY CRISES CURRENCY CRISIS CURRENCY DEVALUATIONS CURRENCY RISK CURRENT ACCOUNT CURRENT ACCOUNT DEFICITS DEBT DEBT CRISIS DEFICITS DEMAND DEPOSITS DENOMINATED LOANS DEPOSITORS DEVALUATION DEVELOPMENT ECONOMICS DOLLAR TERMS DOMESTIC BANKS DOMESTIC CREDIT DOMESTIC FINANCIAL INTERMEDIATION DOMESTIC FINANCIAL MARKETS DOMESTIC FINANCIAL SYSTEMS DOMESTIC INVESTORS DOMESTIC LIQUIDITY DOMESTIC POLICIES ECONOMIC BOOM EMERGING MARKET ECONOMIES EMERGING MARKETS EXCHANGE RATE EXCHANGE RATE REGIME EXCHANGE RATES EXPORT GROWTH EXPORTS EXTERNAL BORROWING EXTERNAL DEBT EXTERNAL FINANCE EXTERNAL SHOCKS FEDERAL RESERVE BANK FEDERAL RESERVE BANK OF NEW YORK FINANCE COMPANIES FINANCIAL ASSETS FINANCIAL CONTAGION FINANCIAL CRISES FINANCIAL DISTRESS FINANCIAL GLOBALIZATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL REPORTING FINANCIAL SECTOR FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL VOLATILITY FISCAL POLICY FOREIGN ASSETS FOREIGN BANKS FOREIGN BORROWING FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN EXCHANGE MARKETS FOREIGN INVESTORS FOREIGN MARKETS FORWARD COMMITMENTS GDP GLOBALIZATION GOVERNMENT DEBT GOVERNMENT GUARANTEES HEDGE FUNDS HONG KONG MONETARY AUTHORITY INCOME GROUPS INTERDEPENDENCE INTEREST RATE POLICY INTEREST RATES INTERNATIONAL BANKING INTERNATIONAL BANKING FACILITY INTERNATIONAL CAPITAL INTERNATIONAL FINANCIAL ARCHITECTURE INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL RESERVES LIQUID MARKETS LIQUIDITY LIQUIDITY SUPPORT LOCAL CURRENCY LOOTING LOW INTEREST M2 MACROECONOMIC IMBALANCES MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MACROECONOMIC POLICY MACROECONOMICS MERCHANT BANKS MONETARY AGGREGATES MONEY MARKET MONEY SUPPLY MULTIPLE EQUILIBRIA MUTUAL FUND NOMINAL INTEREST RATE OFFSHORE BANKING PORTFOLIOS PRICE DECLINES PRIVATE BANKS PRIVATE EXTERNAL DEBT PRIVATE SECTOR PRODUCTIVITY RECESSION RISK FACTORS RISK TAKING SAVINGS SAVINGS DEPOSITS SHORT TERM DEBT STOCK MARKET STOCK MARKET PRICES STOCK MARKETS STOCK PRICES SUPERVISORY AUTHORITIES TRADING TRANSPARENCY The authors investigate the origins of the East Asian crisis and its contagion, examine the channels of contagion, and discuss policy recommendationsThey make detailed recommendations in the context of nine general lessons learned from the East Asian crisis. 1) Preventing crises and contagion: avoid large current account deficits financed through short-term private capital inflows. Aggressively regulate and supervise financial systems to ensure that banks and nonbank financial institutions manage risks prudently. Put in place incentives for sound corporate finance to prevent high leverage ratios and overreliance on foreign borrowing. 2) Managing crises and contagion: In the context of sound policies, mobilize timely external liquidity of sufficient magnitude to restore market confidence. At times of crisis, "bail in" private foreign creditors. When official resources are too limited for the magnitude of the crisis or contagion, and when private creditors are not amenable to coordination, some involuntary private involvement may be needed too. Keep in mind that there is no one-size-fits-all monetary and fiscal stance for responding to crises and contagion. 3) Resolving the systemic consequences of crises and contagion. Move swiftly to establish domestic and international mechanisms for dealing with the assets and liabilities on nonviolable banks and corporations. Cushion the effects of crisis on low-income groups through social policies to ameliorate the inevitable social tensions associated with adjustment. 4) Developing an effective regional financial architecture. Improve mechanisms for preventing, managing, and resolving crises and contagion at the regional level in ways consistent with improvements in the global financial architecture. 2014-08-25T17:27:36Z 2014-08-25T17:27:36Z 2001-06 http://documents.worldbank.org/curated/en/2001/06/1346344/crisis-contagion-east-asia-nine-lessons http://hdl.handle.net/10986/19635 English en_US Policy Research Working Paper;No. 2610 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific |