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Is East Asia Safe from Financial Crises?

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Abstract

This paper looks at the measures taken by East Asian countries since the 1997-8 crisis to reduce the odds of a new crisis. It finds that odds are low, but far from zero. Much progress has been done to deal with the vulnerabilities that have been identified so far, but some remain. The massive accumulation of foreign exchange reserves is raising the threshold at which markets would trigger speculative attacks, but the threshold is still well within reach of international markets. Efforts at building a regional defense system are slow and unlikely to come to fruition in the near future.

Suggested Citation

  • Charles Wyplosz, 2007. "Is East Asia Safe from Financial Crises?," IHEID Working Papers 02-2007, Economics Section, The Graduate Institute of International Studies.
    • Handle: RePEc:gii:giihei:heiwp02-2007
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    2. Hiroshi Fujiki & Akiko Terada-Hagiwara, 2007. "Financial Integration in East Asia," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 25(S1), pages 57-100, December.
    3. Luc Can & Mohamed Ariff, 2009. "Performance of East Asian banking sectors under IMF-supported programs," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 14(1), pages 5-26.

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    More about this item

    Keywords

    International Economics; Exchange Rates; Currency rises; Foreign exchange reserves;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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