Sailing through this Storm? Capital Flows in Asia during the Crisis

Cédric Tille

No 202011, Working Papers from Hong Kong Institute for Monetary Research

Abstract: The current crisis has led to an unprecedented collapse in international capital flows, with substantial heterogeneity across regions. Asian economies were relatively unaffected, despite having been the center of the storm in the crisis of the late 1990s. The contraction in capital flows for Asian countries was limited to the most acute phase of the crisis following the collapse of Lehman Brothers, after which capital flows rebounded. We find that the stronger performance of Asia primarily reflects its more limited reliance on international banking compared to Europe and the United States. We find little evidence that the drivers of capital flows had a differentiated impact in Asia. Finally, we show that while higher initial levels of foreign reserves did not insulate countries from a turnaround in private capital flows, a larger use of reserves at the height of the crisis limited the contraction in gross private outflows.

Keywords: International Capital Flows; Banking Integration; Crisis (search for similar items in EconPapers)
Pages: 50 pages
Date: 2011-07
New Economics Papers: this item is included in nep-ban, nep-ifn, nep-mon, nep-opm and nep-sea
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Citations: View citations in EconPapers (4)

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Journal Article: SAILING THROUGH THIS STORM? CAPITAL FLOWS IN ASIA DURING THE CRISIS (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hkm:wpaper:202011

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