Analyses | 10 August 2007

Ten years after the Asian Crisis

In a new Lowy Institute Analysis, Dr Stephen Grenville looks back at the decade-old Asian financial crisis in search of insights on current vulnerabilities. 

Stephen Grenville

  • Stephen Grenville

In a new Lowy Institute Analysis, Dr Stephen Grenville looks back at the decade-old Asian financial crisis in search of insights on current vulnerabilities. 

Stephen Grenville

  • Stephen Grenville
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Executive Summary

Dr Grenville argues that while there is little chance of any repeat of 1997-98 any time soon, at some point in the future the core vulnerabilities of the crisis period will re-emerge: volatile capital flows and fragile financial markets. Moreover, if the future does hold another sudden stop capital reversal, the IMF has neither the resources nor the procedures to act as an effective lender of last resort. Worse, the Fund lost credibility in the region during the crisis, which means that countries will be slow and reluctant to draw on its assistance.