Taylor & Francis Routledge, 2009, 276 p.
Nearly ten years after the Asian Financial Crisis, financial turmoil has reappeared – this time it is ravaging the world’s wealthiest countries and dragging the global economy along for the ride. It forces one to reflect on the last major financial crisis to afflict the global economy, and to consider whether there are any similarities, and whether there are any lessons from that crisis that we can apply to the current one.
In the crisis of 2008, easy money and lax standards on mortgage lending have created a bubble in the real estate markets of the US and Europe. This scenario is all too familiar to those knowledgeable about the Asian Financial Crisis – a real estate bubble enabled companies to inflate the worth of their assets and to borrow more. Banks were all too eager to lend to them. And in 2008, derivatives and excessive leveraging of Wall Street financial institutions have brought the global financial system to the brink of collapse. This too is similar to the situation in 1997, when the near collapse of Long Term Capital Management likewise threatened a global financial meltdown.
While the contributions to this volume were all written prior to the onset of the 2008 crisis, they nevertheless offer important insights into the nature of financial crises in the twenty-first century. Written by a distinguished group of individuals from government, the private sector, international organizations, and academia, the chapters provide an overview of developments in the main affected countries during the Asian Financial Crisis, as well as the lessons learned and corrective measures taken at the country, regional, and international levels. Importantly, attention is also paid to the areas where substantial improvements are needed. The current crisis heightens the relevance of these lessons.
Lessons from the Asian Financial Crisis will be invaluable to those studying international relations, international finance, international economics and East Asian studies.
Richard Carney is Assistant Professor in the S. Rajaratnam School of International Studies at Nanyang Technological University.