Prevailing views suggest that short-term, unhedged foreign borrowing and crony capitalism, in combination with a weak financial system and lack of transparency may lie at the heart of the Asian financial crisis of 1997. Although the crisis first began in Thailand, it quickly spread to the rest...

In this paper, I give a detailed account of the creation and the evolution of Korea Investment Corporation (KIC) – a sovereign wealth fund established in 2005 by the Korean government. In doing so, I highlight three of its unique features. First, the case of KIC effectively shows the problem...

The paper discusses and revisits some of the most popular stories behind the 2001 financial crisis in Argentina, i.e. the prolonged overvaluation of the peso owing to the Currency Board arrangement, the lack of fiscal adjustment, and the negative external environment which triggered a “sudden...

This paper presents empirical evidence that bank lending, and capital inflows can explain the severity of the Asian crisis of 1997 above and beyond macroeconomic fundamentals. We find that countries that share Japanese banks as their major lender with Thailand, the first victim in the Asian...

Fragility that periodically erupts into a full-blown financial crisis appears to be an integral feature of market-based financial systems in spite of the emergence of sophisticated risk management tools and regulatory systems. If anything, the increased frequency of modern crises underscores how...

It is widely believed that seriously excess debt problems form a major cause of the 1997 Asian financial crisis. This paper investigates empirically the role of the debt problems with respect to both the won/$US rate fluctuations and the won collapse in November 1997. The problems are...

In many theoretical models of debt crises, the operative trigger for the run on sovereign debt is a shortage of the liquidity reserves necessary to finance short-term debt services. As a result, the concept of a solvent, illiquid sovereign debtor has generated significant literature on debt...

What was different about the collapse of the Asian emerging markets in 1997? The free fall of the Mexican peso and the collapse of the Mexican Bolsa produced a "Tequila effect" that spread through most of South America but did not create a sell off in the global financial markets similar to that...

The prime task of modelling cross-market is to predict the imminence of a pestilent currency crisis. Empirical models are developed here to study the roles and channels of contagion in exchange rate volatilities, in ways in which are as economically sound and econometrically simple as possible....

The dramatic impact of the current crisis on performance of businesses across sectors and economies have been headlining the business press for the past many months. Interestingly, the impact of the crisis across categories of goods/services and across economies reveals several interesting...