Strengthening Financial Sectors and Preventing Crises

Tomás J. Baliño and José Viñals
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Tomás J. Baliño: IMF’s Monetary and Financial Systems Department
José Viñals: Central Bank of Spain

Chapter 9 in Successes of the International Monetary Fund, 2009, pp 170-190 from Palgrave Macmillan

Abstract: Abstract In the latter part of the 1990s, several emerging market economies, particularly in East Asia, had serious crises whose effects were felt worldwide. Large capital outflows were accompanied by major financial and economic distress in the region in a mutually reinforcing process. The problems spread across borders, as banks and other investors in developed countries fled from emerging markets. Deprived of funding, banks and other financial intermediaries in East Asia cut down credits and in some cases (for example, Indonesia) banks faced runs and many had to be closed down. This resulted in sharp devaluations, major falls in output, high unemployment, and large fiscal costs. Major financial markets also suffered, as fears spread about the exposure of various international banks to distressed emerging markets.

Keywords: Central Bank; Financial Sector; Financial System; Financial Stability; Supervisory Authority (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-23949-4_9

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DOI: 10.1057/9780230239494_9

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