Politics and regulatory capture can play an important role in financial institutions'distress. East Asia's financial crisis featured many distressed and closed financial intermediaries in an environment with many links between government, politicians, supervisors, and financial institutions....

In the East Asian crisis, connections - with industrial groups or influential families - increased the probability of distress for financial institutions. Connections also made closure more, not less, likely, suggesting that the closure processes themselves were transparent. But larger...

The 1997-1999 East Asian crisis is an interesting case for studying the determinants of distress and closure of financial institutions. Of a sample of 283 financial institutions from Indonesia, Korea, Malaysia, the Philippines, and Thailand, 120 experienced distress, and by July 1999, 38 were...