IDEAS home Printed from https://ideas.repec.org/p/unc/g24pap/12.html
   My bibliography  Save this paper

Reform Of The International Financial System And Institutions In Light Of The Asian Financial Crisis

Author

Listed:
  • Yung Chul PARK
  • Yunjong WANG

Abstract

When East Asian countries came under speculative attacks in 1997, some of them were not able to defend themselves, and subsequently had to seek the financial assistance of IMF and accept its stabilization programmes. These crisis-hit countries were criticized for not having restructured their financial, corporate, and public sectors along the lines suggested by the Washington consensus. This failure was singled out as the main cause of the crisis and, understandably, these crisis-hit countries were subject to heavy doses of structural reforms. The East Asian crisis became contagious, even threatening the stability of major international financial centres. The severity and contagiousness of the East Asian crisis underscored the importance of, and renewed interest in, reforming the international financial system. Numerous proposals have been put forward. The G-7-led reform, however, has concentrated its efforts on reforming the financial and corporate sectors of developing economies, while by and large ignoring the problems of the supply side of international finance. As was the case in the Mexican crisis of 1994/95, the appetite for radical reform of the international financial system has receded considerably in the wake of global recovery. The ongoing debate on the future direction of the international financial reform in fact suggests that most of the problems that beset the international financial system are likely to remain unchanged. This pessimistic outlook arouses deep concern in developing countries lest they remain vulnerable to future financial crises, even if they faithfully carry out the kinds of reform recommended by IMF and the World Bank. Given this reality, developing countries may have to develop a defence mechanism of their own by instituting a system of capital control and adopting an exchange rate system that lies somewhere between the two corner solutions.

Suggested Citation

  • Yung Chul PARK & Yunjong WANG, 2001. "Reform Of The International Financial System And Institutions In Light Of The Asian Financial Crisis," G-24 Discussion Papers 12, United Nations Conference on Trade and Development.
  • Handle: RePEc:unc:g24pap:12
    as

    Download full text from publisher

    File URL: http://www.unctad.org/en/Docs/pogdsmdpbg24d12.en.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Andrew K. Rose, 1999. "Is there a case for an Asian Monetary Fund?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue dec17.
    2. Dani Rodrik, 2000. "Institutions for High-Quality Growth: What They are and How to Acquire Them," NBER Working Papers 7540, National Bureau of Economic Research, Inc.
    3. Eichengreen, Barry & Mody, Ashoka, 1999. "Would Collective Action Clauses Raise Borrowing Costs?," CEPR Discussion Papers 2343, C.E.P.R. Discussion Papers.
    4. repec:wsi:rpbfmp:v:01:y:1998:i:01:n:s0219091598000053 is not listed on IDEAS
    5. Chang, Roberto & Velasco, Andres, 2000. "Financial Fragility and the Exchange Rate Regime," Journal of Economic Theory, Elsevier, vol. 92(1), pages 1-34, May.
    6. Benjamin M. Friedman, 2000. "Debt Restructuring," NBER Working Papers 7722, National Bureau of Economic Research, Inc.
    7. Sebastian Edwards, 1999. "How Effective Are Capital Controls?," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 65-84, Fall.
    8. Michael P. Dooley, 2000. "Can Output Losses Following International Financial Crises be Avoided?," NBER Working Papers 7531, National Bureau of Economic Research, Inc.
    9. Morris Goldstein, 2000. "Strengthening the International Financial Architecture: Where Do We Stand?," Working Paper Series WP00-8, Peterson Institute for International Economics.
    10. Stiglitz, Joseph E., 2000. "Capital Market Liberalization, Economic Growth, and Instability," World Development, Elsevier, vol. 28(6), pages 1075-1086, June.
    11. Ueda, Kazuo, 1998. "The East Asian Economic Crisis: A Japanese Perspective," International Finance, Wiley Blackwell, vol. 1(2), pages 327-338, December.
    12. Miller, Marcus & Zhang, Lei, 2000. "Sovereign Liquidity Crises: The Strategic Case for a Payments Standstill," Economic Journal, Royal Economic Society, vol. 110(460), pages 335-362, January.
    13. Michael D. Bordo & Bruce Mizrach & Anna J. Schwartz, 1998. "Real versus Pseudo-International Systemic Risk Some Lessons from History," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 31-58.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unc:g24pap:12. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joerg Mayer). General contact details of provider: http://edirc.repec.org/data/unctach.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.