Emerging market country financial crisis

Author: Alexander Lamfalussy
Publisher:
Publish Date: 2002-01-01
Features: "There has been much said and written about financial crises in emerging market countries. The unique feature of this book is that Alexander Lamfalussy combines his long-standing experience at the Bank for International Settlements with his exceptional analytical skills, raising thought-provoking questions. Highly recommended for everyone to read!" In this book, a renowned expert in international banking closely examines the trend of financial globalization and its potential impact on financial fragility. Will financial globalization bring greater instability risks to financial markets—perhaps even systemic risks—or will it lead to smoother market operations? How should governments, central banks, and international institutions respond to the symptoms of financial fragility? Alexander Lamfalussy analyzes four major crises that occurred in emerging market countries: the Latin American crisis of 1982-1983, the Mexican crisis of 1994-1995, the East Asian crisis of 1997-1998, and the Russian crisis that began in 1998. The author finds that short-term debt accumulation and asset price bubbles are the root causes of these four crises. The enthusiastic participation of lenders and investors from Western countries played a significant role, while globalization is also one of the factors that exacerbated the crises. However, whether the process of globalization makes developed countries more susceptible to the symptoms of fragility remains an unresolved question. Lamfalussy does not simply prescribe policy solutions but, after careful consideration, proposes a series of practical and wise policy recommendations.