Thoughts Of The Asian Crisis

During the second half of 1997, currencies and stock market prices plunged in value across Southeast Asia, beginning in

On the other hand, in Asia, currencies in most of the countries had become so overvalued. Therefore, they had to devalue followed by floating exchange rates. On the other hand, it is evident that the regions had experienced some level of economic growth before the crises. For Mexico, this was engaging in Free trade (as a member of NAFTA) as well as the discovery of oil reserves, both of which promised a great future for the country. On the other hand, Asia had gained a reputation as the growth center of the world, which showed that the country had been experiencing some level of growth. For Mexico and Asia, political issues (Mexico in 1994) also contributed to the crises. However, this was not particularly the case with the debt crisis of 1982. Political tensions within each country resulted in investment problems, which aggravated economic problems that they were already facing. With regards to recovery, both Asia and Mexico received bail-out packages that would help the countries towards recovery. Here, international help was needed given that the countries faced significant economic problems that would have worsened without

In 1997 the country’s exports were no longer booming and the Thai economy entered a unsafe and unpredictable phase. Foreign investors were skeptical about the current-account deficit and the big loans property developers. Bad debt continued to mount up and the stock market crashed to depths not seen in eight years. This caused the baht to fall prey to speculative attack. High debt, heavy borrowing, large current account deficit, and the semi-fixed exchange rate system all played a part to the Thai crisis.

The most recent financial crisis of 2007 was felt throughout the world, and brought about huge economic consequences that are still being felt to this day. Within the United States, the crisis undoubtedly resulted in a surge in poverty and unemployment, a significant drop in consumption, and the loss of trust in the capitalist economic system. Because of globalization, this crisis was felt through the intertwined global markets, affecting underdeveloped countries even more. Historical events from the past have taught us that financial crises such as the one we suffered during 2007 have occurred a vast number of times. From Mexico to Thailand, these financial crises have resulted in contagion worldwide, and have caused governments to

The IMF did provide relief but at the expense of the food subsidies which the Thai rely on to compete for food prices. If the economy of Thailand were left alone, given their own economic sovereignty rather than launching them in the vicious global market while being compared and linked to the titanic financial power of the dollar, their quaint agricultural and textile industry could have thrived and met the requirements to maintain their nation. The deeply rooted free market ideals of globalization forced the Thai baht to be overvalued. The wolf pack like instincts (bred by the greed and profit seeking nature of global capitalism) of the foreign investors let the baht to be over sold and the price of the currency to be driven down into obscurity. The global market capital perspective provides an insightful perspective as to why the Thai currency crash was so impactful to not just Bangkok, or Asia but the entire globe. The interconnectedness of the international economy provides a community for nations but due to the infinite connections that exist in this paradigm, the problems of one place can be caused by anybody and leave widespread consequences in every modicum of the

When analyzing causes of the global financial crisis and its specific symptoms, it is clear that the deepening of globalization processes and high level of internationalization of the world economy determined the significant losses of national financial systems and slowed down their development.

The Global Financial Crisis, also known as The Great Recession, broke out in the United States of America in the middle of 2007 and continued on until 2008. There were many factors that contributed to the cause of The Global Financial Crisis and many effects that emerged, because the impact it had on the financial system. The Global Financial Crisis started because of house market crash in 2007. There were many factors that contributed to the housing market crash in 2007. These factors included: subprime mortgages, the housing bubble, and government policies and regulations. The factors were a result of poor financial investments and high risk gambling, which slumped down interest rates and price of many assets. Government policies and regulations were made in order to attempt to solve the crises that emerged; instead these government policies backfired and escalated the problem even further.

Then the crisis has spread to Asia especially in Japan, Korea, China, Singapore, Hong Kong, Malaysia, Thailand, and Indonesia. Some experts believe that the problem was triggered by mark-up housing price in the United States. Also, the U.S. Federal Reserve (the Fed) had less prudent to stabilize the financial system since many years. This situation is motivated by a hope to keep up the demand for residential properties and then banks in the United States distributed the housing loans to people who do not have adequate financial capacity such as, the people who do not have income, job and asset. Furthermore, these housing credit made into investments tool to attract the investors such as banks, securities firms and insurance. Unfortunately, there are a lot of unpaid loans in a large numbers. As a result, banks have difficulties to pay investors who need to withdraw money from banking products while prices are still high. It makes the market structure to be disturbed because the interrelated of investment product.

During the last decade, the world saw some of the most severe economic shocks and crises since The Great Depression of the late 1920’s. The crises of Mexico in 1994, Russia in 1995, Asian countries in 1997 and even recently in Latin America in 2000 have shown us that the economic shocks have a very drastic and crippling effect on the stricken countries. Rapid capital outflow; firms and banks overwhelm by bad debts; inability to provide loans; bank closures due to sudden capital losses and devaluation of the home currency, all have struck the affected countries simultaneously that their central banks did not have enough sufficient reserves to protect themselves. The realization of the

The worldwide impact of the recent financial crisis outlines the importance of having a decent understanding of crises. Latest episode has definitely showed that status of economic as well as the financial performance is greatly affected by financial turmoil. During the crisis, world stock markets have been collapsed, largest financial institutions have been bought out or fallen, and the wealthiest nations like UAE, UK of USA had to stand up and aid their financial systems as well as the economic ones. World economic activity was a common topic in the newspapers for many years after it has occurred. “The present financial crisis is a culmination of many systematic factors. The economic crisis has made us to believe that world

The development of the global financial crisis is a result of a number of complicated and interrelated factors. Starting with the downturn of the housing bubble in the US economy, the fall in the financial stability in the US, and the rising commodity prices, all of the factors, in one way or other, has initiated the crisis. As stated by the United Nation in its Conference on Trade and Development, and in its Trade and Development Report 2008, the major factors for the crisis are:

The Asian Financial Crisis, that began in the middle of 1997, was a surprise to many. It all started when Thailand had a financial crisis which ended up spreading to its neighboring Southeast Asian countries. This mass spread was largely due to the intense devaluation of currencies in Asia . The crisis caused mass capital outflows and investor flight because investors lost confidence in the financial systems in many of those countries. Although it started out being contained in Thailand, it spread to other East Asian countries and ended up impacting Malaysia, Indonesia, the Philippines, South Korea, Hong Kong, and China. Consequently, the lack of investor confidence caused the international stock markets suffered from this crisis, which also impacted other countries that reside outside of the Asian continent.

The financial crisis of 2008, which caused the most damage in world economies between the years 2007 and 2009, has a long list of potential culprits that helped to initiate the crisis. The global economy has become so entangled that it is isolate a specific "first cause" or be able to point the blame at any one group in isolation. However, economists now have a whole range of specific causes in which they attribute to the crisis, yet this is still somewhat in dispute. In reality there are most likely a multitude of different factors that all contribute some role in the formation of the crisis. Some common culprits seem to be the repeal of the Glass Steagall Act, the creation of derivative trading, as well as the whole subprime area of lending. However, each of these factors did not exert its force in a vacuum. Markets today are extremely dynamic in nature and all of these factors played a domino role in destabilizing the others.

Much of the criticisms made are valid, but they tend to fall short of addressing the whole truth of the issue. Whilst it is true that the US could have done much more to avert this crisis, it is also true that so too could the other states. It is only by their own hand that they are so entangled in this system; if they protected their economies more then they wouldn’t be so exposed to the effects of the actions of the American government and financial system.

It is important to begin with the observation that the global economic crisis, which was marked by the great recession, began with problems in the management of monetary regimes at national and international levels. Angelides & Thomas (2011) opined that the global financial crisis was an effect of either action or inaction on the part of the people who were responsible for the management of the global monetary system. The