Financial Crises : Lessons from the Past,
Preparations for the Future
Financial Crises : Lessons from the Past,
Preparations for the Future
Largely concentrating on 1997-8 Asian Financial Crisis, this series of essays pulls apart what happened, and possible lessons for the future.
Four Distinctive Features of the Resolution Phase (of Banks)
First, the distribution of loan losses and other sources of capital deficiency was not uniform from bank to bank...
Second, resolution efforts had to address both privately owned and state-owned banks....
Third, information about the extent and incidence of losses among banks often evolved slowly. Rarely do we observe a one-shot resolution and recapitalization. More often, there are several waves, each separated by several months...
Fourth, a sharp currency depreciation was often in the background, influencing the timing, nature, and scale of the recapitalization... Devaluation in these circumstances tended to improve the country's international economic competitiveness, speeding the recovery of output and employment.