Economics at your fingertips  

Optimal Policy Mix under Financial Crisis

Delano Villanueva () and Vincent Lim ()

in Staff Papers from South East Asian Central Banks (SEACEN) Research and Training Centre

Abstract: This paper examines ex-post solutions to the recent financial crisis. It is noted that the standard prescriptions of budgetary cuts, tax increases, currency depreciation and high interest rates were not effective. To avoid future crisis and in the context of an open capital market, the paper proposes a longer-run policy strategy consisting of a three-pronged approach: (i) use open market operations to neutralise the liquidity impact of capital inflows; (ii) strengthen bank asset-liability management and risk-focused supervision to ensure that capital inflows are invested productively and safely in order to meet calls at any time for capital outflows obligations; and (iii) adopt managed exchange rate policy that is supported by a strong foreign reserve position, sound money and sound banking policies, and a strong fiscal position.

Date: 2000
ISBN: 983-9478-15-X
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found ( [301 Moved Permanently]-->

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this book

More books in Staff Papers from South East Asian Central Banks (SEACEN) Research and Training Centre Contact information at EDIRC.
Bibliographic data for series maintained by Azharin ().

Page updated 2020-08-04
Handle: RePEc:sea:spaper:sp62