Cambridge Catalogue  
  • Your account
  • View basket
  • Help
Home > Catalogue > From Asian to Global Financial Crisis
From Asian to Global Financial Crisis

Details

  • 16 b/w illus. 62 tables
  • Page extent: 504 pages
  • Size: 228 x 152 mm
  • Weight: 0.66 kg
Add to basket

Paperback

 (ISBN-13: 9780521134156)

Available, despatch within 3-4 weeks

US $37.99
Singapore price US $40.65 (inclusive of GST)
From Asian to Global Financial Crisis
Cambridge University Press
9780521118644 - From Asian to Global Financial Crisis - An Asian Regulator's View of Unfettered Finance in the 1990s and 2000s - By Andrew Sheng
Index

Index

AAA ratings 13, 15, 335, 348, 356

rating agencies: recommended reform of 390–391

Abdulgani-Knapp, Retnowati 229

ABN AMRO 1

Aghevli, Bijan B. 239

aging population 107, 133

See also demography

Akamatsu, Kaname 46

Allianz insurance group 327

amah syndrome 207, 260

amakudari 57–59, 105

American International Group (AIG) 5–6, 384

anticyclic action 356, 373, 386, 402

See also procyclic behaviour

arbitrage 14, 61, 171, 329, 343, 356, 366, 370, 386, 394, 401

yen carry trade 11, 23, 59–62, 65, 171, 254, 275, 329, 384

Argentina 77, 229, 264

Argentinean crisis 82

Arrow, Kenneth, J. 84

Article VIII, IMF 136

ASEAN Economic Community 314

ASEAN Swap Arrangement (ASA) 26, 76, 312

Bilateral Swap and Purchase Agreement (BSA) 312

Chiang Mai Initiative (CMI) 312

ASEANA 322

Asia

definition of 316

Asian values 3

See also Asian integration, Association of Southeast Asian Nations (ASEAN)

Asia Pacific Economic Co-operation (APEC) 318

Asian Arrangements to Borrow 27

Asian Bond Market Initiative (ABMI) 312, 313, 321

Asian crisis 2–4, 10, 21–43, 409

and global supply chain 49, 87

and Japan 44–70, 116, 303

causes of: 27–28, 44, 65, 84–85, 86–88, 375, 397

comparison with subprime 375, 376, 388

financial systems: failure of 95–108, 114–115

banking 306

calls for reform of 358–360

short-term debt to forex reserves ratio 282

stock market collapse p.209, table 8.11

lessons from 6–13, 185–186

losses: capital flight 116

foreign market 307

in GDP 307

in real estate value 306

in stock market capitalization 304, p.305, table 12.1, p.306, table 12.2

of overall wealth 303, 304

Manila Framework 38–39, 318

prevention strategies 185, 303–324

socio-political impact of: 307

gender impact of 308

income inequality decreases 309

unemployment rate 307–308

as catalyst for political crisis 211, 212, 225, 226, 230, 239

See also individual countries, Asian Monetary Fund, International Monetary Fund, Washington Consensus, yen carry trade

Asian currencies 22, 23, 25, 28, 32, 149, 150, 210, 275, 279, 307, 322, p.42, fig. 1.1

baht: 4, 64, 65, 126–127, 131, 132, 145, 148, 149, 150, 155, 156, 208, 257, p. 129, table 6.2

BoT 151, 154–156, 185, 257

and yen carry trade 61, p.136, table 6.4

depreciation of 29, 34, 39, 218

in PAIF 313

floating of 4, 21–26, 43, 151, 152

historical stability 140, 145–146

speculation in 197, 207, 210, 208, 224, 275, 353

bond market in 314

Hong Kong dollar: 22, 150, 255, p.256, table 10.1, 259, 261–263, 266, 269–273

Link 257, 260, 269, 272, 277

Philippine peso 24, 34, 136, 140, 249

renminbi: 217, 279, 281, p. 285, table 11.4, 297, 300, 301, 309, 379

during Asian crisis 284

and Asian currency 322–323

ringgit: 34

exchange rate p.190, table 8.2, 210, 211, 213–217, 230, 322

attacks on 24, 197, 208, 210, 211, 212, 214

rupiah 24, 32, 34, 40, 218, 220, 224, 225, 227, 229, 230, 237, 243, 249–250, 266, p.222, table 9.2

Singapore dollar 29, 34

won 181, 182, 173, p.175, table 7.7

yen 65–67

yen–dollar exchange rate 29, 39, 48, 49–50, 61–67, 88, 113, 145–146, 150, 173, 177, 210, 212, 225, 266, 269, 275, 322, 385

yen zone 11, 28, 78

Asian Currency Unit (ACU) 321–322

ASEANA 322

Asian Development Bank (ADB) 36, 40, 156, 237

Asian Bond Online 313

regional cooperation 319–320

Asian Drama 72–73

Asian integration 311

agreements 317

Asian Development Bank, role of 320

blocks to: financial 314, 315, 316–322

bureaucratic 321

Japan's history in Asia 218–219

China, role of 323

economic integration: 311, 320–322

EAEC 317

EAFTA 314

Japan, role of 318–320, 321

monetary integration 320–323

scenarios: for financial integration 312, 322–323

trade integration 311

See also Asian Bond Market Initiative, Asia Pacific Economic Cooperation, Association of Southeast Asian Nations, European Union, North American Free Trade Agreement

Asian Miracle 2, 43, 45, 57, 60, 74, 86, 159, 182, 396, 406

World Bank study 77, 111

review of 406–407

Asian Monetary Fund (AMF) 33–34, 38, 39, 113, 120, 314, 318

Aslanbeigui, Nahid 308

asset bubbles

and subprime crisis 379–383, 388, 405, 408

and Asian Crisis: 86, 103, 376

in China 279, 300

in Malaysia 198–202, 210

in Hong Kong 259

in Japan 55–56, 59

in Thailand 148, 153

asset classification systems 164

asset markets 37, 55, 202, 207

asset securitization 330, 401

asset-backed securities (ABS) market 14, 334, 347, 382

in transformation of banking 335

intervention to prevent collapse of 381

Association of Southeast Asian Nations (ASEAN) 25, 47, 116, 230, 249, 278, 311, 314, 323

ASEAN+ 3, 312, 313

ASEAN+ 4, 28

ASEAN+ 6, 323

ASEAN Economic Community 314

ASEAN currencies 25, 26, 76, 287, 312

Japan and 145

Kyoto meeting 312

trade with China 47, 279, 281

See also ASEAN Swap Arrangements

Australia 22, 33, 39, 47, 75, 78, 122, 123, 152, 226, 304, 313, 318, 397, 404

ASEAN+ 6, 32

Australian dollar: 384

yen carry trade 329

Thailand rescue 29, 152

Avian flu 320

baby boomer generation 20, 75

Backman, Michael 105, 153

Bagehot, Walter 350

Bagehot rule 240, 274

Lombard Street 153, 350

baht: 4, 64, 65, 126–127, 131, 132, 145, 148, 149, 150, 155, 156, 208, 257, p.129, table 6.2

BoT 151, 154–156, 185, 257

and yen carry trade 61, p.136, table 6.4

depreciation of 29, 34, 39, 218

in PAIF 313

floating of 4, 21–26, 43, 151, 152

historical stability 140, 145–146

speculation in 197, 207, 210, 208, 224, 275, 353

bail-outs 20, 41, 174, 367, 393

balance sheet 349, 359, 364–365, 386

analysis 117, 119

bubble 11, 19, 404

corporate 12, 119, 158, 237, 330, 334, 341

crisis 365, 403

effect 155

fragility 112, 159, 181

international 48, 49, 66–70

off-balance sheet 15, 334, 335, 356, 390, p.337, fig. 13., 2

balance-of-payments 37, 45, 82, 90, 119, 301

Bangko Sentral ng Pilipinas (BSP) 24

Bangkok Bank of Commerce (BBC) 136, 147, 148

Bangkok International Banking Facility (BIBF) 132, 136, 138, p.139, table 6.6, 140, 148

Bangkok Metropolitan Bank (BMB) 147, 148

Bangkok property market 132, 136

Bank Andromeda 227

Bank Duta 236

Bank for International Settlements (BIS) 2, 49, 61, 76, 313, 337, 359

Committee on Payment and Settlement Systems 345

Bank Indonesia 233

and IMF 238

and the rupiah 24, 225, 249–250

Bantuan Likuiditas Bank Indonesia (BLBI) 238, 239, 241

blanket guarantee 238–239, 240

Indonesian Bank Restructuring Agency (IBRA) 238

monetary policy dilemma 250–251

See also Djiwandono, Soedradjad J.

bank lending 365

in Hong Kong 268

Japanese 61, 65, 145, 146, 177, 202, 245, 249

Bank Negara Malaysia (BNM) 1, 32, 75, 77, 194, 197, 202, 210

See also ringgit

Bank of America 5

Bank of Credit and Commerce International (BCCI) 267

Bank of England 2, 5, 14, 24, 26, 76, 127, 154, 255, 376

abandoning of ERM 253

defence of sterling 254

Bank of Israel 78

Bank of Japan 39, 54–55, 57, 61, 78, 254, 266, 376

See also yen

Bank of Korea 37, 68, 164–166, 177, 183, 265

See also won

Bank of Spain 373

Bank of Thailand (BoT) 21, 22, 26, 29, 30, 150–152, 154–156

crisis management: 131, 147

float of baht 21, 152

Nukul report 152–155


bank panic (run) 44, 65, 89, 111, 147, 183, 238

Lehman Brothers, failure of 384

bank restructuring 77, 117, 213, 236

IBRA 238

bank spread 100

bank standstill 29, 30, 113, 250

Bank Summa 236

bank-dominated financial system 91, 97, 104, 138, 177

banker compensation 366

Bankers Trust 328

banking crisis 39, 82, 86, 117, 118, 131, 147, 194, 197, 209, 240, 330, p.98, table 4.3

and Asian banking reputation 107

search for yield 107, 330, 356, 381

banking system 12, 28, 33, 87, 89, 91, 94, 148, 330

Asian: 88–91, 93–94, 99–107

China 290

Hong Kong 103, 266–269

Indonesia 231, 233

Japan 9, 38, 48, 57–59, 63, 65, 90, 105, 303, 304

Malaysia 93, 194, 197, 198, 203, 209, 212

South Korea 37, 164–166

Thailand 138–141

banker compensation 366

banking consolidation 93, 306, 326

Basel Capital Accords 56, 63–64, 355, 391, 401

collateralized debt obligation (CDO) 15, 335, 348, 356, 373, 382, 391

in United States: 14, 326

large complex financial institutions 330, 402

liquidity crunch in 14, 263, 335, 384

originate-to-distribute model 330, 335–336, 387, 391

reform of 77, 104–107, 399

shadow banking system 14–15, 336, 339, p.337, fig. 13.2

super-regulator 401–402

Tier 1 capital 376

Tier 2 capital adequacy ratio 56, 64

universal banking model 328, 401

wholesale banking 14, 108, 330, 355, 387

See also individual banks, asset-backed securities, Asian Development Bank, central banks, deposit insurance, financial sector regulation, World Bank

Bankruptcy Law 96, 105

BankWatch, Thomson 132, 177

Bantuan Likuiditas Bank Indonesia (BLBI) 238, 241–242

Barclays de Zoete Wedd (BZW) 23

Barclays 1

Barton, Dominic 103, 104

Basel Capital Accord 56, 63–64, 401

Basel II Accord 355, 391

Tier 1 capital 376

Tier 2 capital adequacy ratio 56, 64

basket of currencies 23

Battle of the baht 197

Bear Stearns 5, 339, 381, 382, 389

Belarus 384

Belgium 129

Bergsten, Fred 49, 317

Berlin Wall 13, 73, 80

Bernanke, Ben 17, 377

bi-currency 11

Bidaya, Thanong 151–152, 156

Big Five crises 379–380

bilateral agreements 39, 40, 312, 317, 319

Bilateral Swap Arrangement and Repurchase Agreement (BSA) 312

ASEAN Swap Arrangements (ASA) 26, 76, 312

Black Wednesday 253

black swan risk 386

Black Thursday 35, 263

Black-Scholes option pricing model 328

blanket guarantee 117, 120

in Indonesia 238–241

Northern Rock 5, 120, 382

Boediono 251

bond market 94, 100, 183, 313

Asian funds 313

in Thailand 138

See also Asian Bond Market Initiative, Pan-Asian Bond Index Fund

Born, Brooksley 393

Boston Tea Party 122


bounded rationality 365

Brazil 117, 124, 254, 264, 273, 275

bonds 171, 183

real 384

Brent oil crude 383

Bretton Woods

agreements: 82–83, 109, 121–125

and emerging markets: 124

voting power 398

institutions: financial sector regulation 352–354

See also International Monetary Fund, World Bank, Washington Consensus

British Bankers’ Association 339

Broad Money (M2) p.143, table 6.8, p.167, table 7.3, p.200, table 8.6, p.261, table 10.4, p.234, table 9.5, 331, p.333, fig. 13.1, p.377, fig. 15.1

Brown, Ellen Hodgson 399

bubble 88

Asian asset: in Japan 55–56, 59

in Thailand 148, 153

in Malaysia 198–202, 210

in Hong Kong 259

in China 279, 300

dot.com 88, 311, 345, 377, 380, 391

hedge funds use of 254

precursor to crises: 86, 103, 376

subprime 379–383, 388, 405, 408

real estate bubble: 88, 356, 360, 364, 365, 386, 389

in Japan 88

in Thailand 126, 147–148

budget surplus 127, 131, 227, 257

Buffett, Warren 325

bull run 206, 207

Bumiputra Foundation 32

Bundesbank 289

Burma.

See Myanmar

Bush, president George W. 6, 403

BZW 23

C. Itoh 46

CA Pacific Securities 266, 268–269

Camdessus, Michel 6, 31, 37, 197, 215, 229

Canada 30, 75, 122, 152

capital account liberalization

as factor in Asian Crisis 67, 95, 102

cornerstone of Washington Consensus 32, 111, 117

Impossible Trinity 149

in China 282

in Indonesia 242, 243, 379

in Malaysia 202, 210

in South Korea 118, 162, 166, 169, 171, 173–174, 180–181

in Thailand 136

premature 379

capital adequacy 56, 64, 104, 147, 164, 267, 339, 405

risk-weighted capital-adequacy ratio 197

capital asset

Sharpe pricing model 328

pricing ratio 104

capital controls

in Asia 95, 99

in Indonesia 230, 240–242

in Malaysia 207–208, 213–21

in South Korea 166, 185

capital flows 28, 67

and yen carry trade 28, 67

in China p.298, table 11.6

in Indonesia p.247, table 9.9

in Malaysia p.192, table 8.3

in South Korea p.178, table 7.8, 181

in Thailand 13, p.134, table 6.3

monitoring of short-term 313

See also Asian currencies, capital account liberalization, capital controls, exchange rate

capital market

Asia, overall weakness of 12, 89, 94–95, 375

China's 288, 320, 323

colonial 90

Hong Kong's 275–276

dark side of 79

IMF's lack of expertise in 81, 120

post-Asian crisis developments 104, 117, 321, 323

Thailand's 152–154

See also stock market

capitalism 73, 89

See also free market

Caprio, Jerry 77


carry trade 12, 62, 133–136, 329, 404

and increased market volatility 67, 386

capital outflows 67

in Thailand 136, 140

yen carry trade 11, 23, 59–62, 65, 171, 254, 275, 329, 384

See also arbitrage, interest rate spread, hedge fund, zero interest rate policy

Carse, David 78, 267

Castells, Manuel 8

central banks 153–154, 240, 254, 274

Asian: 8, 13, 76

ASEAN 76, 78

EMEAP 22, 25, 38, 39, 78, 79

Bangko Sentral ng Pilipinas (BSP) 24

Bank Indonesia: 233, 250–251

and IMF 238

and the rupiah 24, 225, 249–250

blanket guarantee 238–239, 240

BLBI 238, 239, 241

IBRA 238

Bank of Japan 39, 54–55, 57, 61, 78, 254, 266, 376

Bank of Korea 37, 68, 164–166, 177, 183, 265

Bank Negara Malaysia: 1, 32, 75, 77, 194, 197, 202, 210

exchange rate controls 24, 213, 214

Bank of Thailand: 21, 22, 26, 29, 30, 150–152, 154–156

crisis management 21, 131, 147, 152

Nukul report 152–155

central bankers: 24–27, 57, 75–80, 386, 389

dilemmas for 153, 392

Djiwandono, Soedrajdad J. 220, 236, 237, 229, 238–239

foreign exchange markets 28, 336

Hong Kong Monetary Authority (HKMA) 1, 22, 27, 32, 33, 35, 78, 216, 255, 263, 264, 265, 268, 272, 289

Monetary Authority of Singapore 284

weaknesses: blind spots of 386

central bank put 340, 368, 393

regulatory capture 392–395

schizophrenia 383

See also International Monetary Fund, Greenspan, Alan, monetary policy, U.S. Federal Reserve

Central Limit Order Book (CLOB) 214

chaebol 37, 93, 97, 163, 169, 174, 181, 182, 184

Chakkaphak, Pin 158

Chang, Ha-Joon 164

Chartered Bank 90

Chase Manhattan Bank 115

Chen Yuan 289

Chiang Mai Initiative (CMI) 312, 319

See also ASEAN Swap Arrangements

Chicago Board of Trade 328

Chicago Mercantile Exchange 328

Chile

exchange controls 213, 215

China 47, 79, 121, 287–300, 301, 311, 319, 378, 397, 398

asset bubbles 379

Asian crisis: role in 278, 284

beneficiary of 297, 302

Crisis-5 comparison 68, 279–287, 297, 300

export growth 287, 296–297

FDI inflows 296, 297, p.298, table 11.6

financial sector: 100, 106, 107, 281

indicators: p.295, table 11.5

GDP 279, p.280, table 11.1

external debt to GDP 282, 289

inflation rate 284, 309

reforms: 291, 301

of banking system 290

of financial system 284, 289

renminbi (RMB) 37, 217, 270, 271, 281, 284, p.285, table 11.4, 297, 300, 301, 309, 322–323

state-owned enterprises (SOEs): 268, 281, 287, 288, 293–294

listing of 294

transformation of 296–297

stock market: 292, 301, 379

capitalization 294

subprime crisis fiscal package 385

U.S.-China relations 3, 407

WTO accession 288, 296

China Banking Regulatory Commission 15

China Mobile 294

China National Petroleum Corporation 293

Cho Yoon Je 77

Chomsky, Noam 75


Chun Chang 97

Citibank 23, 90, 93, 106, 327

Citigroup 327, 382

Cold War 79, 385

See also Berlin Wall

collateralized debt obligation (CDO) 15, 335, 348, 356, 373, 382, 391

See also credit default swap, shadow banking system

Committee of European Securities Regulators 21

Committee on Payment and Settlement Systems (CPSS) 105

Commonwealth Central Bank Governors’ meeting 76

computerized trading 329

connected lending 103, 164, 328

Cooperman, Lee 23

corporate debt 96, 174, 213

Corporate Debt Restructuring Committee 213

corporate governance 2, 56–57, 77, 79, 95, 102–103, 181, 184, 281, 289, 297, 326, 353, 355, 361, 369, 387, 400

Corrigan, Gerald E. 7

corruption 82, 85, 362, 408

in Bretton Woods institutions 83

in Japan 58

in Indonesia 118, 226, 241, 251

Council of Securities Regulators 355

Counterparty Risk Management Policy Group (CRMPG I) 331

Counterparty Risk Management Policy Group II (CRMPG II) 333, 345–347, 357

Cox, Christopher 393

credit

bureau 104

card 105, 106, 216

discipline 103, 239, 344

rating agencies 104, 338, 345

risk data 104

spread p.29, 100, fig. 4.2

credit default swap (CDS) 15, 334, 335, 337–338, 339, 344–345, 356, 384

See also collateralized debt obligation, derivatives, financial engineering

Crisis-5 p.60, fig. 2.5, 61, 65

See also Indonesia, Malaysia, South Korea, Philippines, Thailand

Crockett, Andrew 2

crony capitalism 391

Crook, Clive 389

Crosby Corporate Advisory 219

crowd behaviour of pyramiding 88

crowded trade 334, 346, 347

curb market 97, 171

currency 23, 214, 215

currency board arrangement 229, 255, 257

global: standard 7, 48, 87

dominant reserve currency 11

speculation in: 24–25, 210–211, 256, 261–263, 266

lack of constraints on 254–255, 270

traders 32, 185, 214

See also Asian currencies, capital control, devaluation, exchange rate

current account deficit 12, 28, 29, 82, 281, 330

in Indonesia 220, 243, p.222, table 9.2

in Malaysia 187, 188, 189, 198, p.190, table 8.2

in Mexico 132

in South Korea 161, 166, 169, 173, 181, p.175–176, table 7.7

in Thailand 25, 127, 131, 132

in United States 5, 13, 18, 378–379, 399

current account surplus, in Japan 66–69

Daewoo Group 163, 184

Dai Lu 272, 273

Dai Xianglong 25

daily band of exchange fluctuations 180

daily interbank interest rates 215

Dainong retail chain 177

Daiwa Bank 63

Danaharta 213

Danamodal 213

Davies, Howard 2

Future of Regulation 388

De Juan, Aristobulo 77

De Juan Rule 240


debt

debt-to-equity ratio 199, 233, p.235, table 9.6, 267

public 59, 225, 240, 251, 404

public sector 99

private sector 126, 133, 245, 359

refusal to roll-over loans 37, 41, 119, 177

U.S. dollar-denominated 66

yen-denominated p.52, fig. 2.3, 61, 66

Delhaise, Philippe F. 132, 140, 177, 233, 260

Demirgüç-Kunt, Asli 77

demography 84, 94–95, 107, 288, 289, 378

impact on financial sector 94–95, 378

Deng Xiaoping 288, 291

deposit insurance 99

deposit rate 91, 236, 304

depositor run

See bank panic

deregulation 110, 169, 231, 244, 325, 329, 334, 386, 394, 399

of financial system 55

of global markets

derivatives 8, 64, 78, 325–326, 329–330, 334, 339, 356, 364, 385, 387, 393

gross market value of 331

LCFI transactions in 330

leverage 331–339

Liar's Poker 336

ongoing risks from 400–401

See also arbitrage, collateralized debt obligation, credit default swap, hedge funds, financial engineering, subprime crisis

Deutsche Bank 328

devaluation 284, 399

in Asia 35, 149, 297, 300

baht 22–23, 64–65, 131, 151, 155–156, 197, 257

Mexican peso 132–133

renminbi 270, 284

rupiah 249, 309

Development Bank of Singapore (DBS) 93

Dillon, Read and Co. 328

directed credit 93, 166

Djiwandono, Soedrajdad J. 220

on Indonesian banking system 236, 237

on blanket guarantee 238–239

sacking of 229

dollar

See U.S. dollar

Dooley-Garber-Folkerts-Landau 12

dot.com bubble 88, 311, 345, 377, 380, 391

double loss rule 240

double play 208, 256, 270

Dow Jones Industrial Average (DJIA) 36, 264, 329, 376

Dresdner Bank 327

Druckenmiller, Stan 23, 253, 272

Drucker, Peter 370, 409

due diligence 333, 344, 356, 365, 372, 373, 401

East Asian Economic Caucus (EAEC) 317

East Asian Free Trade Area (EAFTA) 314

East Asian Summit 323

Economic Review and Policy Dialogue (EPRD) 313

economic theory 375, 397

neo-classical flaws 72–74

See also Keynes, John Maynard

Eigen, Peter 8

El-Erian, Mohamed 124

emerging markets 76, 106, 124, 136, 254, 292, 301, 378, 408

lessons from crises for 401, 402

trading in 207–208

Employees’ Provident Fund (EPF) 197

endaka 51–53, 55

See also yen

Enron failure 325, 355, 391

environmental sustainability 397–398

equity capital 206, 207, 209

equity markets 8, p.92, table 4.1, 94, 100, 202, 254, 264, 307, 314

Euro 311, 316, 378

Eurobonds 307, 314

Europe 316

subprime crisis in 402

European Union (EU) 311, 318, 320

European Central Bank (ECB) 5

subprime crisis management 381

European Monetary System (EMS), collapse of 23, 316, 322

European Monetary Union 106, 123, 214, 311

European Universal Bank 328

Exchange Equilibrium Fund 31

Exchange Fund Investment Limited (EFIL) 276

Exchange Fund Ordinance 272

exchange rate 22, 48, 78, 86, 102, 113, 117, 149–150, 153, 257, 309, 359, 360, 385, 404, 407

and IMF 114, 115, 116, 117, 118, 121, 125

control: 4, 68, 99, 113, 132, 211, 213, 215–217, 227, 242, 263, 273, 296, 404

tool 26, 210–211, 407

in China 217, 284, p.285, table 11.4, 297, 300, 301, 309

in Hong Kong 255, p.256, table 10.1, 257, 259, 269–270, 272

in Indonesia p.222, table 9.2, 230, 237, 243, 249–250

in Malaysia p.190, table 8.2, 210, 211, 213–217

in South Korea 173, p.175, table 7.7, 181

in Thailand 126, p.129, table 6.2, 149–150, 155–157

See also U.S. Federal Reserve, yen–dollar exchange rate

Exchange Rate Mechanism (ERM) 253

Executives’ Meeting of East Asia-Pacific Central Banks (EMEAP) 22

NAB 27, 38, 39, 78, 79

2nd EMEAP Governors’ Meeting 25

export credit 52, 53

external borrowing 132, 166, 189, 194, 359

external debt to GDP ratios, Asia 282, 371

Faber, Marc 71

Fabian socialism 74

fair value accounting 340, 341, 391

Fallows, James 110

Fannie Mae 5, 334, 383

Farmer, J. Doyne 343

Federal Deposit Insurance Corporation (FDIC) 326, 373

Federal Reserve (Fed)

See U.S. Federal Reserve

Federal Reserve Bank of New York (FRBNY) 2, 273–274, 382

Finance One 148, 158

Financial Accounting Standards Board (FASB) 341

financial engineering 325–331

and carry trade: 329, 385–386

yen 11, 23, 59–62, 65, 171, 254, 275, 329, 384, 404

financial derivatives 334

credit default swap 334

investment bankers 349

Liar's Poker 336

liquidity provided by 331, p.332, table 13.1, p.333 Fig. 13.1

over-the-counter market 336

shadow banking system 336–337

vulnerabilities: 345–347

complexity of financial products 333–334

excessive leverage 330–331

regulatory “black hole” 336

See also deregulation, quant, risk management, subprime crisis, yen carry trade

financial integration

Asia 312, 314, 315, 316–323, 320–323

Europe 106, 123, 214

global 326–328

Financial Policy and Payments Division 77, 111, 236

See also World Bank

financial sector regulation 350, 351, 354, 358, 360–363

Asian banking 104–107

blind spots for regulators 371–373

Bretton Woods institutions 352–354

enforcement: 373

Glass-Steagall Act 63, 326, 328

reform bill package 38, 183

SPISSPER Process Cycle p.362, table 14.1, 363–374

subprime crisis, implications from 355, 390–395

See also anticyclic action, Financial Stability Forum, aging population

Financial Sector Assessment Program (FSAP) 105, 117, 123, 125, 352–354

See also International Monetary Fund

Financial Sector Restructuring Authority (FRA) 34

Financial Services and Markets Act 357

Financial Services Authority (FSA) 154, 341, 354, 357, 390

financial stability 122–123

as destabilizing 343–344

Financial Stability Forum 2, 345, 369

Financial Stability Reports 120

fiscal gap 82

fiscal policies 115, 386

stimulus package 41, 213

Fischer, Stanley 1, 31, 78, 133, 114

fixed exchange rate regime 309

flexible exchange rate regime 117

flying geese model 11, 46–48, 54, 281

dragons and tigers p.42, fig. 1.1

Fong, Nellie 289

Fong Weng Phak 38

foreign bank borrowing 177, 245

foreign currency borrowing 194, 245, 250

foreign debt 13, 152, 155, 177, 180, 181, 219, 237, 245, 250, 359

Foreign Direct Investment (FDI) 95

in Asia, 28, 50: from United States 50

from Japan 51, 52, 53, 69, 70

Japanese withdrawals: 59

in China 297–298, 300

in Indonesia 243, 247

in Malaysia 189, 202

in South Korea 166, 171, 177, 178

in Thailand 133, 134, 145, 146

See also capital flows

foreign exchange 12, 12, 13

debt exposure: 29, 36, 68

of China 282, p.283, table 11.3

of Hong Kong 266, p.259 table 10.3

of Indonesia 236–238, 245, p.246, table 9.8, 249, 250

Malaysia 194, p.196, table 8.4, 197, 211

South Korea 37, p.172, table 7.6, 173, 180

net foreign exchange liabilities 180, 211

reserves, in Asia 12, 26, 28, 35, 65, 194, 207, 211, 257, 282, 314

foreign exchange markets: 26, 78, 79, 254

manipulation of 336

foreign portfolio equity liability 209

foreign portfolio investment (FPI) 50, 93, 133, 202, 207

forward commitment capacity (FCC) 121

Fraga, Arminio 253

France 316

See also Euro, European Union, Group of 7, Group of 22

Freddie Mac 5, 334, 383

free market 8, 63, 73, 78, 81, 110–112, 259, 368, 373, 384

limitations of 386, 388

See also arbitrage

Free Trade Agreement (FTA ) 317, 319

Free Trade Region 319

French Hospital Rule 240, 242

Frenkel, Jacob 349

Friedman, Milton 73, 273

Fukuda, Takeo: Fukuda doctrine 323

Fukuda, Yasuo 323

Fukuyama, Francis 3

futures market 207, 256, 270, 271, 272

Galbraith, John Kenneth 1, 19–20, 395

GDP fever 398, 408

Geithner, Tim 1, 30, 336

Gelb, Alan 77

Germany 75, 225, 316, 318, 323, 385, 401

Pfandbrief 401

See also European Union, Euro, Group of 7, Group of 10, Group of 20

Gini coefficient 309

Glass-Steagall Act 63, 326, 401

repeal of 328

global financial architecture 122–123, 125, 275, 278, 387, 396–398, 403

global financial market, deregulation of 386

equity market 314

in bonds 8

imbalances in 378

liquidity 88

savings 387

stock market capitalization 314

global standards and codes 117, 123, 369

global supply chain 7, 11, 47, 66, 108, 146, 278–279, 281, 297, 322

global warming 397

globalization 8–10, 47, 302, 315, 397

and Asian crisis 396, 403

implications for risk management 371

role of regional cooperation 316

See also networked economy

gold standard 11, 50

golden mean 400

Goldman Sachs 6, 22, 23, 24, 349

Goodhart, Charles 272, 273, 340, 368

Goodstadt, Leo 255

Gorbachev, Mikhail 111, 292

Government-Sponsored Enterprises (GSE) 383

governance 16, 81

corporate governance 2, 56–57, 77, 79, 95, 102–103, 181, 184, 281, 289, 297, 326, 353, 355, 361, 369, 387, 400

crisis of 396

implications for 405

Gramm-Leach-Bliley Act 328

Great Crash 1, 19–20

Great Depression 6, 11, 18, 377

comparison with subprime crisis 375

Great Moderation 5, 13

Great Stability 397

Greater East Asian Co-Prosperity Sphere 318

Greenspan, Alan 215, 273, 274, 331, 347, 368, 388, 389, 391, 405

See also U.S. Federal Reserve

Grenville, Stephen 226, 233

Gross, Bill 14, 336

Group of 7 (G-7) 30, 31, 33, 39

Group of 10 (G-10) 122, 125, 317, 318

Group of 20 (G-20) 122, 403

Group of 22 (G-22) 2, 122

Group of 30 (G-30) 105, 354

Growth Commission Report 9

Guangdong Investment and Trust Company (GITIC) 268

Guidotti-Greenspan rule 28

Gumerlock, Robert 340, 342

Gyohten, Toyoo 33, 48

Habibie, B. J. 230

Hale, David 41, 275

Han Feizi 16

Hanbo Steel 174

Hang Seng Index 21, 35, 260, 264, 266, 270, 271, 273, 275

See also Stock Exchange of Hong Kong

Hanke, Steve H. 257, 277

Hartanah, Siti

See Ibu Tien

Hashimoto, Ryutaro 40

Hayek, Friedrich 73

hedge funds 5, 15, 22–23, 61, 62, 127, 249, 253–255, 275–276, 329, 339, 347, 381

in Hong Kong 270–273

See also financial engineering, yen carry trade

highly leveraged institutions (HLIs) 254

Hodgson Brown, Ellen 399

Hokkaido Takushoku Bank 38, 63, 265

Hong Kong 171

banking sector: 103, 260, 266–269

bubbles 257, 259–263

exchange rate regime p.256, table 10.1, 309

currency board system of 255, 257, 264

financial sector: strength of 266–269

foreign exchange reserves 257, p.259, table 10.3

government: 271–277

monetary policy 255

key lessons from crisis 276

real economy of: GDP 255, 257, 260, p.258, table 10.2

vulnerabilities of economy 259–263

return to China 21, 79, 259

Hong Kong and Shanghai Banking Corporation (HSBC) 35, 90, 99

Hong Kong Convention and Exhibition Centre (HKCEC) 21

Hong Kong dollar 22, 150, 255, p.256, table 10.1, 259, 261–263, 271–273

link to U.S. dollar 257, 260, 269, 272, 277

liquidity crisis 263–266


Hong Kong Interbank Offered Rate (HIBOR) 35, 264

Hong Kong Monetary Authority (HKMA) 1, 22, 27, 32, 33, 35, 78, 216, 255, 263, 264, 265, 268, 272, 289

Hong Kong Exchange Fund Advisory Committee (EFAC) 265

Hong Kong Mortgage Corporation Limited 268

Hong Kong Securities and Futures Act 2003 357

Hong Kong Securities and Futures Commission 2

Hong Kong Special Administrative Region (HKSAR) 4, 11, 34, 65

review of currency defence 265

Hong Kong Stock Exchange 79, 269, 270, 276, 293

Exchange Fund Investment Limited (EFIL) 276

Hang Seng Index 21, 35, 260, 264, 266, 270, 271, 273, 275

Tracker Fund of Hong Kong (TraHK) 276

Honma, Tadayo 59

Honohan, Patrick 77

Hopper, Martyn 350

household-credit-to-GDP ratio 106

housing bubble 88, 356, 360, 364, 365, 386, 389, 391

housing price 5, 199, 202, 379, 380

Huang, Ray 302

Human Development Index 311, p.312, table 12.4

Hungary, IMF rescue loan 384

hyperinflation 73

Hyundai 163

Ibrahim, Anwar 211

sacking and arrest of 213

Ibu Tien 224

Iceland, IMF rescue 384

Impossible Trinity 126, 149

incentive structure 16, 83, 231, 337, 356, 370, 400, 408

incentive-compatible safety net 164

income tax 41, 216, 217

incomplete market 72

Independent Evaluation Office (IEO) 117

Asian crisis reports 117–120, 156

See also International Monetary Fund

India 79, 311, 319, 378, 398, 407

environmental sustainability 397

Indochina 90

Indonesia 11, 104, 220

Asian crisis 114–118, 218

recovery 251–252

human costs of 307, 308, 309, p.311, table 12.4

banking crisis: 118, 218, 227, 233, 237–242

Bank Andromeda 227

bank closures 237, 238

Bank Duta 236

crony capitalism in 118, 225, 226

banking system 231, 233

financial system: 231–242

foreign debt 219, 243, 245, 250

debt-to-equity ratio 233

vulnerabilities of 245, p.246, table 9.8, pp.247–248, table 9.9

real economy: FDI 243, 244

GDP 218, p.221, table 9.1, 227, 244, 307

poverty rate 218, 219, 230

IMF: 31, 36, 114, 230, 236, 237, 250–251

Letter of Intent 226–227, 238

Indonesian Chinese 219

OPEC membership 219

politics and the crisis: 224, 229

riots 225, 229, 230, 239

Suharto 36, 40, 211, 219, 225, 226, 227, 229, 230, 233, 238, 251, 266

rupiah 24, 32, 34, 40, 218, 220, p.222, table 9.2, 224, 225, 227, 229, 249–250, 266

stock market 227, 228, table 9.3

yen carry trade 243–244, 254

See also Bank Indonesia, Bantuan Liquiditas Bank Indonesia, Jakarta Composite Index

Indonesian Bank Restructuring Agency (IBRA) 238

Indonesian Democratic Party (PDI) 235


Industrial and Commercial Bank of China (ICBC) 294

information asymmetry 358–359

infrastructure project 82, 189, 198, 226

ING 327

initial public offering (IPO) 106, 233, 276, 294

insider relationship 233

Institute for International Monetary Affairs 33

Institute of International Finance (IIF) 307, 348, 390–391

institutional investor 102, 106, 177, 270, 390

insurance sector 5–6, 94

interbank market 5, 14, 64, 264, 381

interbank interest rate 215

liquidity crisis 264, 383

interest rate spread p.96, table 4.2, 243, 327, p.143, table 6.8, p.167, table 7.3, p.200, table 8.6, p.234, table 9.5, p.261, table 10.4

International Accounting Standards 182, 294, 355

International Accounting Standards Board 370

International Capital Markets Department 120

International Finance Bureau 33

International Finance Corporation (IFC) 313

International Financial Institutions (IFIs) 72, 116, 317

international financial balance sheets 49, 67–70

International Monetary Fund (IMF) 4, 22, 25, 30–31, 76, 110, 111, 314, 317, 378–379

Article VIII of 136

Asian Monetary Fund, opposition to 318

capital resources of 121

institutional weaknesses of 82, 121–125

crisis of legitimacy 116–120, 122

in Asian crisis 112–125

conditionality 39, 119, 156, 314

failure of surveillance 117, 118, 119, 122–125

in Indonesia 31, 36, 114, 226, 230, 236, 237, 238, 250–251

in Malaysia 211, 212, 215

in South Korea 34, 40, 41, 114, 184

in Thailand 26, 29–31, 98, 114, 152, 166, 307

letters of intent (LOI) 40, 166, 226–227, 238

IEO reports 40, 226, 237, 241, 242

in Mexican crisis 112

See also Bretton Woods Institutions, Financial Sector Assessment Program, Manila Framework, Washington Consensus

International Organization of Securities Commissions (IOSCO) 2, 363, 391

International Swaps and Derivatives Association (ISDA) 344

international trade 47, 90, 114, 161

global supply chain 7, 11, 47, 66, 108, 146, 278–279, 281, 297, 322

Internet, the 47, 370–371

intervention band 24, 249, 256

investment banking 5, 6, 8, 12, 15, 37, 115, 254, 266, 325, 328–331, 335–336, 339, 346, 364, 376, 381–385, 394, 401

investment bankers 349

See also credit default swap

investment gap 378

investment spending 198

invisible hand 73, 84

Iraq War 5, 60

Iron Curtain 79

Ismail, Tun Ali 32, 75

Itami, Juzo 58

Jackson Hole Conference 17

Jaffar, Tan Sri Hussein 76

Jakarta 229, 236

Jakarta Composite Index (JCI) 42, 209, 225, 230

Jao, Y.C. 265

Japan 10, 11, 163, 376, 404

Asian crisis, role in 44–70

in Indonesia 245, p.248, table 9.9, 249

in Thailand 145–146

losses during 30

Asian Miracle study 111

banking system: amakudari 57–59, 105, 38, 48, 63, 65, 90, 303, 304

bankers 57, 64

bank lending in Asia 61, 24

banking scandals 58

main-bank system 91

window guidance 166, 183, 315

bubbles: asset 54–57

real estate bubble 365

economic growth 11, 111

flying geese model 46–47

GDP 48–49

FDI in Asia 51–54, 59, 69, 70

NIIP 66, p.68, table 2.1, 69

jusens 58

keiretsu 46, 56, 93

Ministry of Finance 27, 33, 49, 127, 318, 320

Pax Nipponica 45

Tokyo Securities and Stock Exchange 64

stock market capitalization p.306, table 12.2

yen: Plaza Accord effect 48, 65–67

yen–dollar exchange rate 29, 39, 48, 49–50, 61–67, 88, 113, 145–146, 150, 173, 177, 210, 212, 225, 266, 269, 275, 322, 385

yen-denominated debt 52, 66

yen zone 11, 28, 78

yen carry trade 11, 23, 59–62, 65, 171, 254, 275, 329, 384, 404

U.S.-Japan relations 11, 50, 51, 407

zaibatsus 45–46

zero interest rate policy (ZIRP) 59, 376

See also Asian crisis, Bank of Japan

Jinro Group 177

Joint Forum 345

joint venture bank 231

Jones, Alfred Winslow 253

JP Morgan 23, 106, 382

Kang Kyong Shik 38

Kawai, Masahiro 2

Kay, John 10

keiretsu 46, 56, 93

Kenya 82

Keynes, John Maynard 72, 84, 120, 339, 340, 355–356

Keynesian economics 386, 404

Kia 177

Kim Dae-jung 41, 184

comparison with Mahathir 185

Kim Dong Hwan 184–185

Kim In Ho 38

Kim Kihwan 174, 181

Kim Young-Sam 182

Kindleberger, Charles 86, 274

King, Mervyn 2, 120

Kissinger, Henry 22, 217

Knee, Jonathan A 349

Koizumi, Junichiro 58

Kobe earthquake 63

Kondratieff cycle 20

Koo, Richard 303

Korea Composite Stock Price Index (KOSPI) 37, 38, 41

Korea

See South Korea

Korean War 159

Kovner, Bruce 23

Krugman, Paul 86, 111

Kuala Lumpur 75, 76, 206

Kuala Lumpur Composite Index (KLCI) 31, 208–209, 211, 215

Kuala Lumpur Stock Exchange (KLSE) 31, 199, 209, 214

amah syndrome 206

bull run 206, 207

delisting of Malaysian companies from SES 202

foreign portfolio capital 207, 209

real estate speculation 199, 202

Second Board Index 206

Kuroda, Haruhiko 33, 319

Kyoto Meeting 312

laissez-faire 99, 259

large complex financial institutions (LCFI) 330, 402

Latin America, banking reform in 106

comparison with Asia 106

crisis 133, 270, 301, 320, 327

currencies 12, 29, 281

Lee Kuan Yew 230


Leekpai, Chuan 36, 156

Lehman Brothers 376, 383

impact of collapse 384–385

lend/buy and hold 335

lender of last resort 31, 90, 112, 125, 153, 268, 340

letter of intent (LOI) 40, 166, 226–227, 238

leverage, high levels of 356

and Asian crisis 87, 103, 118

in China 281

in Hong Kong 267

in Indonesia 250

in Japan 19, 56, 63

in Malaysia 199, 210

in South Korea 166, 174, 180

in Thailand 141

and investment banks 394

and subprime crisis 14, 15, 18, 403

moral hazard 367, 400

regulating against 401, 406

U.S. leverage ratio 13, 339

See also credit default swap, collateralized debt obligation, derivatives, hedge funds, highly leveraged institutions, shadow banking system, yen carry trade

Levine, Ross 77

Levitt, Arthur 2, 108, 331

Lewis, Michael 336

LG 163

Liar's Poker 336

liberalization 111

of Japanese financial market 56

in Indonesia 231, 242

in Malaysia 194

in Mexico 132

in South Korea 164, 169, 171, 173, 174, 180–182

See also capital account liberalization

Licaros, Gregario 91

linked exchange rate 259, 270, 272

Lipsky, John: on Asian crisis 115–116

liquidity 11, 29, 68, 136, 183

crisis in Hong Kong 263–265

definitions of 340–341

excess 340, 356, 377–379

illusion of 339–342

Liquidity Adjustment Facility (LAF) 264

liquidity puts 335

loans

loan loss provision 240

loan portfolio concentration limit 164

loan to value (LTV) ratio 268, 386

policy loans 166

Lombard Street 153, 350

London Stock Exchange 383, 384

Long Term Capital Management (LTCM) 4, 273–274, 275, 338, 360

Long, Millard 77, 81

long-term capital market 89

Lord Acton 113

Lord Eatwell 124

Lou Jiwei 113

Louvre Accord 50, 55

Luxembourg 321

Maastricht Treaty 311

Maddison, Angus 398

Madoff, Bernard 392

Mahathir Mohamad 25, 32–33, 197, 198, 214

and Anwar Ibrahim 211

and the IMF 212

and Soros 210

comparison with Kim Dae Jung 185

East Asian Economic Caucus (EAEC) 317

main-bank system, Japanese 91

in South Korea 166

Malayan Emergency 213

Malaysia 4–11, 75–80, 103, 187–194

and the IMF 114, 211, 212

asset bubbles in 199, p.201, table 8.7, 202, 209

banking crisis 194, 197, 209

failure of deposit-taking cooperatives 77, 350

banking system 194, 197, 198, p.203, table 8.8, 209, 212

Two-Tier Regulatory System (TTRS) 199

capital controls 113, 213–217, 230

Employees’ Provident Fund (EPF) 197

external debt 194, p.195, table 8.4

FDI 189, 202, p.208, table 8.10

financial system 194–198

monetary policy 77

private sector credit boom 198, 199

GDP 187, p.188, table 8.1, 189, 197, 198, 202

human costs of crisis 307, 308, 309, p.311, table 12.4

voluntary structural adjustment 187

yen carry trade 254

See also Bank Negara Malaysia, Kuala Lumpur Composite Index, Kuala Lumpur Stock Exchange, Mahathir Mohamad

Malaysian ringgit 34

exchange rate p.190, table 8.2, 210, 211, 213–217

unpegging of 217, 322

speculative attacks on 24, 197, 208, 210, 211, 212, 214

managed floating exchange regime 217

Mandelbrot, Benoit B. 358, 360

Manila Framework 38–39, 318

Mao Zedong 291, 293

Marakanond, Rerngchai 147, 151

Marcuse, Herbert 75

margin call 147, 338

Margolis, Richard 284

market 8, 10, 71

market average foreign exchange rate system 181

market concentration ratio, in S. Korea 163

market failure 361, 393, 394, 405

market liberalization 174

market manipulation 3, 254

market principle 174

See also foreign exchange market

Market Practices Committee Hong Kong 78

Markowitz, Harry 328, 347

mark-to-funding 370, 408

mark-to-market 338, 341, 369–370, 382

losses in subprime crisis 376

‘marked to myth’ 382

mark-to-model 341

Martin, William McChesney 20

Marx, Karl 74

Matsushita, Yasuo 39

maturity mismatch 181, 268

McCain, John 393

McKinnon, Ronald I. 54

McKinsey 49, 103, 107

report on South Korea 164, 174

merchant banks 40, 171, 180, 182, 202

Merrill Lynch 1, 5, 284

Mexican crisis 23, 29, 79, 112, 127, 210, 281, 379, 383

comparison with: Asian crisis 132–133

subprime crisis 384

Middle East 5, 49, 90, 219, 230, 316

Ministry of Finance, Japan 23, 27, 33, 49, 57, 318, 320

Ministry of International Trade and Industry (MITI) 46, 57

Minsky, Hyman P., 342–343

financial instability hypothesis 342

Minsky-Kindleberger model of financial crisis 87

Mitsubishi 46, 90

Mitsui 46, 90

Mitsuzuka, Hiroshi 39

Miyazawa, Kiichi

New Miyazawa Initiative (NMI) 318

Mohanty, Madhusudan 103

momentum trade 88

Monetary and Exchange Affairs Department, IMF (MAE) 237

Monetary Authority of Singapore 284

monetary economists 73

monetary integration 320, 321, 322, 323

monetary union 214, 311, 316

monetary policy 77, 377, 386

in European Union 377

in Japan 377, 385

in Malaysia 213, 215

in South Korea 164, 166, 181

in Thailand 126

in United States 377

See also central banks

money market fund 6, 384

money politics 149, 153

moneychangers 90

monobank model 91

Moody's 37, 40, 41, 136, 177, 215

See also rating agencies

moral hazard 5, 34, 86, 102, 113, 140, 181, 356, 366, 367–369, 384

central bank intervention, risk of 240

in subprime crisis 389

Moreno, Ramon 103

mortgage assets 6

Morgan Grenfell 328

Morgan Stanley Capital International (MSCI) 215

Morgan Stanley 6, 326, 349

Mr Yen

See Sakakibara, Eisuke

multicurrency 11

mutual fund 321, 334, 335

in Malaysia 32, 76

in United States 327, 380

Myanmar 83, 323, 407

See also Association of Southeast Asian Nations

Myrdal, Gunnar 72

Nakaso, Hiroshi 39

Namekawa, Masashi 145

Narrow Money (M1) p.143, table 6.8, p.167, table 7.3, p.234, table 9.5, p.261, table 10.4

NASDAQ 314, 392

National Asset Management Corporation (Danaharta) 213

National Car Project 226, 229

National Economic Action Council (NEAC) 212, 213

National Economic Recovery Plan 213

net international investment position (NIIP) 66, p.68, table 2.1, 69

Netherlands Authority for Financial Markets 2

networked economy 396

and Asian crisis 326, 360

and subprime crisis 326

and Internet 47, 370–371

network effect 326, 338

Network Society 8

See also quants, globalization

New Arrangements to Borrow (NAB), Thailand 27

See also Executives’ Meeting of East Asia-Pacific Central Banks

New Century Financial 381

New Miyazawa Initiative (NMI) 318

New York Fed

See also Federal Reserve Bank of New York

New York Stock Exchange (NYSE) 314

crash of ‘87, 55

Lehman Brothers failure, impact on 383, 384

New Zealand 78

dollar 384

Niederhoffer, Victor 253

Nikkei-225 Index 39, 55

Nimmanhaeminda, Tarrin 157–158

Nippon Credit Bank 59

Nitisastro, Widjojo 220

NMB Postbank Group 327

nominal GDP p.68, table 2.1, 69, 156, 307

Nomura Research Institute 64

non-performing loans (NPL) 62, 82, 97–99, 102, 104, 148, 197, 212, 237

North, Douglass 10, 16, 83, 302

North American Free Trade Agreement (NAFTA) 281, 311, 312, 317, 320

North Korea 323, 407

Northern Rock 5, 120, 154, 241, 341, 373, 382, 390

Nukul, Prachuabmoh 138

Nukul Commission Report 138, 150–151, 152, 154–155

Obama administration 2, 78, 403

O'Brien, Richard 397

off-balance sheet 356

SIV 15, 334, 336, 372

Ohmae, Kenichi 311

oil prices 383, 384

Okita, Saburo 46

Olson, Mancur 406

Opium Wars 45, 278

Orde Baru (New Order) 220

See also Suharto

Organization for Economic and Cooperation in Development (OECD) 4, 110, 132, 161, 182

Organization of Petroleum Exporting Countries (OPEC) 219

originate-to-distribute banking model 330, 335, 336, 387, 391


Ortiz, Guillermo 132

outsourcing 312

overnight bank rate 23

overnight HIBOR 264

overnight interest rate 22, 211, 263

overseas borrowing 171

oversight 17, 18, 233, 254, 347, 348, 356, 390, 402

over-the-counter (OTC) 8–9, 214, 254, 336, 339, 393

See also derivatives, financial engineering

Ozeki, Koyo 304

Pacific Investment Management Co. (PIMCO) 14, 327

Page, John 77

Paine Webber 328

Pakistan 384

Pan-Asian Bond Index Fund (PAIF) 313

Park Chung Hee 159

Park Yung Chul 162, 173, 184, 323

Parmalat 355, 391

path-dependency 10

Patten, Chris 10

Paulson, Henry, Jr 9, 355, 394

Pax Nipponica 45

Pelosi, Nancy 20

pension fund 14, 72, 107, 329, 334, 335, 339, 373, 380

Employees’ Provident Fund (EPF) 197

People's Bank of China (PBoC) 25, 217

Peregrine 233, 266

Persaud, Avinash 347, 348, 370, 408

Peterson Institute for International Economics 49

Philippines, the 11, 99, 104

Bangko Sentral ng Pilipinas (BSP) 24

peso 24, 34, 150, 249

Pfandbrief 401

Phuvanatnaranubala, Thirachai 136, 140

Pitsuwan, Surin 133

Plaza Accord 11, 48, 51, 55, 67, 88

policy loan

See also directed credit

policy

finance for growth policy 108

monetary policy 77, 377, 386

in EU 377

in Japan 377, 385

in Malaysia 213, 215

in South Korea 164, 166, 181, 183

in Thailand 126

in United States 37

policymaking 12, 76, 315

politics

role in economic crisis 132, 211

political stability as prerequisite for reform 292, 293

Ponzi scheme 87–88, 140, 202, 342

Madoff, Bernard 392

Post Office Bank 91

poverty 189

impact of Asian crisis on 218, 219, 220, 230, 251, 309

Prada, Michel 2

price discovery 95, 99–102, 361

price distortion 100

price-earning ratios (PE ratios) 100–102

prime broker 254, 329, 330, 338

principal–agent problem 360–363

priority lending 93

priority sector 97, 102

private property rights 110

private sector 36, 41, 91, 113, 119, 125–126, 132–133, 141, 158, 166, 187, 194, 230, 233, 245, 294, 306, 313, 315, 321, 345, 347, 351, 359, 364, 408

private sector credit 143, 166, 199

private sector involvement (PSI) 113

private wealth management 107

privatization of commercial banks 164

procyclic behaviour 356, 391

property rights 8, 9, 10, 16, 17, 102, 107, 108, 291, 294, 301, 354, 361, 362, 389

property sector

See real estate

prudential regulation 110, 181, 369

public debt 59, 225, 240, 251, 404

public sector debt burden 99

quant 328, 329, 330, 343, 386

quant trading behaviour implications 343–344

See also financial engineering

Quantum Fund 32, 253, 272

See Soros, George


Ramos, Fidel Valdez 309

rating agencies 104, 215, 338, 345

AAA status 335, 348

recommended reforms to 390, 391

See also Moody's, Standard & Poor's

raw capitalism 9

Reagan, Ronald 73

real deposit rate 91

real economy 6, 7, 9, 345

financial shocks and 345

damage by asset bubbles 388

key to stability of financial structure 400–401

of Hong Kong 35, 257, p.258, table 10.2, 265

of Indonesia p.221, table 9.1

Japan 63, 67

of China p.280, table 11.1, 281

of Malaysia p.188, table 8.1, 212

of South Korea 158, 159, p.160, table 7.1

of Thailand p.128, table 6.1

of United States 14

real estate bubbles 141

in Thailand 126

in Malaysia 199, 202, 209

See also housing bubbles

real interest rate 97, 169

real time gross settlement (RTGS) 104

realpolitik 122

recession, United States 6, 153, 187, 194, 257, 269, 345, 375, 380, 385

Reed, John 327

regionalism

See Asia Pacific Economic Cooperation, Association of Southeast Asian Nations, Asian integration, European Union, North American Free Trade Agreement

regulation

and financial stability 351–356

basic models of 354

bounded rationality in 365

conventional definition of 351

enforcement and review processes of 373

goals of 354

global standards and codes 117, 123, 369

market incentives in 366

seven principles of, Martin Wolf 355

standards, principles and rules of 369–370

structure of 354

transparency in 367

regulations and prudential criteria 194

regulatory capture 20, 356, 391–392

regulatory forbearance 153, 401

regulatory incentive 368–369

Reinhart, Carmen M. 253

relationship banking 233

renminbi (RMB) 37, 217, 270, 271, 281, 284, p.285, table 11.4, 297, 300, 301, 309, 322–323

Renong Group 211

Reserve Bank of Australia 226

reserves management 1, 22, 214

resource allocation 95, 97, 99, 361

risk management 102

failure of 347–349, 359–360

impact of globalization on 371

risk premium 4, 264

Robert Merton option pricing model 328

Robertson, Julian 23

Roche, David 331

Rodrik, Dani 9

Rogers, Jim 253

Rogoff, Kenneth 39

Rohwer, Jim 303

Roubini, Nouriel 14, 355

Rubin, Robert E. 13, 31, 112, 113, 331

Rumsfeld, Donald 360

rupiah

See Indonesia, rupiah

Russia 4, 73, 77

Russian crisis 183, 230, 270, 273

Russian model 91

Sachs, Jeffrey D. 111, 116

safety nets 164, 353

Sakakibara, Eisuke 2, 30, 85, 321–322, 359, 375

Asian Monetary Fund (AMF) 33–34, 38, 39, 113, 120, 314, 318

Sammi group 174

Samsung 163

Samuelson-Balassa effect 300


Sanyo Securities 38

Sarbanes-Oxley Act 349

SARS 320

savings

glut 133, 377, 378

rate 13, 94, 189, 220, 279, 289, 378

SBC Warburg report 26

Schumpeter, Joseph A. 399

search for yield 107, 330, 356, 381

Second Board Index 206

See also Kuala Lumpur Stock Exchange

Second World War 78, 82, 94, 375

Japan's Greater East Asia Co-prosperity Sphere 318

Yasukuni shrine 319

Securities and Exchange Commission of Thailand 136

Securities and Futures Act, Hong Kong 357

Securities and Futures Commission of Hong Kong (SFCHK) 269

Securities Exchange Act, U.S. 393–394

securitization 14, 330, 334, 356, 381, 387, 390, 401

Sen, Amartya 74

Senior Supervisors Group 390

Seoul 37, 38, 41

S.G. Warburg 328

shadow banking system 14–15, 336, p.337, fig. 13.2, 339

Shanghai A share Composite Index 301

Sheng, Andrew 1, 2, 15–16, 74–80

Shirk, Susan 292

short selling 3, 31, 207, 253, 265, 270

short-term bank deposits 89

short-term capital flows 198

monitoring of 313

short-term debt 119, 171

Siamwalla, Ammar 140

Silapa-archa, Banharn 147

silver standard 256

Singapore, Republic of 11, 65, 171, 242

banking sector 103

Central Limit Order Book (CLOB) 214

Monetary Authority of Singapore 284

Singapore dollar 29, 34

Stock Exchange of Singapore (SES) 202, 214, 384

single dominant reserve currency 11

Singson, Gabby 24

Sirivadhanabhakdi, Charoen 140–141

Smith, Adam 73

Soekarnoputri, Megawati 225

Sonakul, Chatu Mongol 150

Sopiee, Tan Sri Noordin 33, 212, 213, 215

Soros, George 23, 24, 32, 33

and Mahathir 210

and the Bank of England 127, 253, 254

Quantum Fund 32, 253, 272

Soros Fund Management 253

speculation on baht and ringgit 207, 210, 253

See also hedge funds

South Africa 336

South Asia 72, 281

India 79, 311, 319, 378, 398, 407, 397

South Korea 4, 11, 35, 38, 83, 99, 159, 177, 278, 399, 407

Asian crisis: and IMF 38, 40, 118–119, 162, 169, 171, 184–185

Black Monday 38

Second National Humiliation Day 40

reasons for 173–186

banking system 37, 40, 93, 162, 164, p.165, table 7.2, 166

window guidance 166, 183, 315

capital account liberalization in 118, 162, 166, 169, 171, 173–174, 180–181

chaebol 37, 93, 97, 163, 169, 174, 181, 182, 184

external debt 37, 40, 41, 161, p.172, table 7.6, 173, 233

FDI 166, p.168, table 7.4, 169, 171, 177

financial sector 163–173

financial market 97, 164, 181, 182, 183

NIIP 68

stock market 169

human cost of crisis 307, 308, 309, p.311, table 12.4

Japanese industrialization model in 162, 163

lessons from crisis 185–186

OECD membership 163–164, 169, 171, 184

real economy, pre-crisis 159–162, 183

GDP 159, p.160, table 7.1, 161, 164

recovery of 184

won 37, 38, 40, 41, 173, p.175, table 7.7, 181, 182

WTO membership 174

yen–dollar exchange rate, effect on 37, 68, 173–177

See also Bank of Korea, capital flow

Southeast Asia

See Association of Southeast Asian Nations, Indonesia, Malaysia, Myanmar, Philippines, the, Singapore, Thailand, Vietnam

Southeast Asian Central Banks (SEACEN) 76

sovereign ratings

credit 177

debt 40

See also rating agencies

Soviet Union 73, 292

free market experiment 111

See also Russia

Sparrow, Malcolm 365

special investment vehicle (SIV) 15, 334, 372

off-balance sheet 356

speculation

financial 6, 22, 24, 32, 86, 140, 147

hedge funds 5, 15, 22–23, 61, 62, 127, 249, 253–255, 275–276, 329, 339, 347, 381

in Hong Kong 270–273, 273

Ponzi scheme 87–88, 140, 202, 342, 392

See also financial engineering, regulation, Soros, George

Spence, Michael 9

spillover 23, 353

SPISSPER Process Cycle P.362, table 14.1, 363

Ssangyong automobile group 174

Standard & Poor 37, 41, 177

See also rating agencies

state-led mindset 185

state-owned enterprises (SOEs) 268, 281, 287, 288, 293–294

Steady Safe 266

sterling crisis 214, 253

Stiglitz, Joseph E. 1, 16, 78, 110, 111, 118

stock borrowing and lending programme 208, 270

Stock Exchange of Hong Kong (SEHK) 35, 384

Hang Seng Index 21, 35, 260, 264, 266, 270, 271, 273, 275

Stock Exchange of Singapore (SES) 202, 214, 384

Stock Exchange of Thailand (SET) 132, 141, p.142, table 6.7

SET Index 132, 141, p.142, table 6.7

stock index futures market 271

stock market capitalization

global 314

losses during Asian crisis p.305, table 12.1

in China 100, 282, 294, p.295, table 11.5

in Hong Kong 267

in Indonesia P.232, table 9.4

in Japan P.304, table 12.2

in Malaysia P.196, table 8.5, 206–207

in South Korea P.165, table 7.2

in Thailand 138

in United States 3

stock markets

collapse of p.209, table 8.11

computerized trading 329

Dow Jones Industrial Average (DJIA) 36, 264, 329, 376

Hong Kong Stock Exhange 79, 269, 270, 276, 293

Hang Seng Index 21, 35, 260, 264, 266, 270, 271, 273, 275

Jakarta Composite Index (JCI) 42, 209, 225, 230

Korea Composite Stock Price Index (KOSPI) 37, 38, 41

Kuala Lumpur Composite Index (KLCI) 31, 208–209, 211, 215

Kuala Lumpur Stock Exchange (KLSE) 31, 199, 202, 206, 207, 209, 214

Lehman Brothers failure, impact on 383, 384

London Stock Exchange 383, 384

NASDAQ 314, 392

New York Stock Exchange (NYSE) 55, 314

Nikkei-225 Index 39, 55

quants’ major share of 330

Stock Exchange of Singapore (SES) 202, 214, 384

Stock Exchange of Thailand (SET) 132, 141, p.142, table 6.7

Tokyo Stock Exchange 55, 321

See also hedge funds, futures market

Strauss-Kahn, Dominique 124

stress test 346, 365, 372, 390, 404

See regulation

structural adjustment programme (SAP) 187, 227, 287, 379, 405

Malaysia's voluntary reforms 187

See also International Monetary Fund, World Bank

Studwell, Joe 93

subprime crisis 3, 5–6, 14, 88, 102, 274, 275, 339, 359, 375, 379, 387–389

and Asian crisis 325, 326, 376, 376, 385

causes of 325–326

bubbles 379–383, 388, 405, 408

financial system weaknesses 356

responsibility for 387–389

subprime mortgages 5, 14, 372, 381, 382, 387

excess leverage 394

Lehman Brothers failure 383

U.S. banking system 14, 337, 387

financial rescue plans 385

IMF loans 384

G-3 central banks 376

U.S. Fed 14, 376, 381, 388

New Century Financial bankruptcy 381

regulatory implications of 372, 373, 390–391

See also collateralized debt obligation, credit default swap, financial engineering, regulation, shadow banking system

Suharto 36, 40, 211, 219, 225, 226, 251

and the IMF 226, 227, 229

Bank Duta 236

family and cronies 226, 233, 266

resignation of 230

Sukarno 219, 220

Sumitomo 46, 90

Summerfield, Gale 308

Summers, Lawrence H. 1, 34, 38, 78, 375

Sun-tzu 84, 351

super-regulator 401–402

Supinit, Vijit 147

supply distortion 99

sustainability, environmental 397, 404, 407

Sutrisno, Try 229

Suzuki, Yoshio 55

swap market 279, 346

Swiss Banking Corporation 328

Swiss National Bank 289

systemic risk 315, 343, 354

Taha, Tan Sri Aziz 76, 77

tail event 341, 346

Taiping Rebellion 45

Taiwan 11, 28, 34, 38, 46, 47, 74, 106, 166, 257, 297

asset bubbles 379

New Taiwan dollar 35, 263

Taleb, Nassim Nicholas 360

Tan Tat Wai 290

taxation 5, 41, 59, 63, 82, 99, 122, 145, 287, 301

credit-friendly tax regime 389

Malaysian tax-free year 216–217

reforms 110

Taylor, Bill 373

Taylor, John 380

technology licensing 116

Ten Commandments: Washington Consensus 110

Tequila effect 133

Tesobonos 132

Thailand 11, 126–127, 131

and IMF 26, 29–31, 98, 114, 152, 166, 307

baht 4, 64–65, 126–127, p.129, table 6.2, 131–132, 145, 148–149, 150, 208, 257

BoT 151, 154–156, 185, 257

and yen carry trade 61, p.136, table 6.4

depreciation of 29, 34, 39, 218

in PAIF 313

floating of 4, 21–26, 43, 151, 152

historical stability against dollar 140, 145–146

speculation in 197, 207, 210, 208, 224, 275, 353

banking system 104, 138, 147–148

Bank of Thailand (BoT) 21, 22, 26, 29, 30, 150–152

banking crisis management 131, 147

Nukul report 152–155

crisis: reasons for 126, 131

real estate bubble 132, 141, 148

Mexican crisis, comparison with 127, 132–133

financial sector 131, 132, p.138, table 6.5

current account deficit in 127, 131

foreign capital flows 133, 136

Japanese FDI in 145–146

net external wealth position 145

yen carry trade 133, 136

Financial Sector Restructuring Authority 34

human cost of crisis 307, 308, 309, p.311, table 12.4

gender impact 308

key lessons from crisis 157–158

politics and the crisis 148–152

real economy p.128, table 6.1

GDP 25–26

external debt of 26, 131, 141, 145

Thatcher, Margaret 73

Tien, James 35

Tier 1 capital 376

Tier 2 capital adequacy ratio 56, 64

Tinbergen, Jan 149

Tokuyo City Bank 39, 265

Tokyo Consensus 409

Tokyo Stock Exchange 55, 321

Tom Yum Koong Syndrome 133

too big to fail 240

chaebol 181, 182

Lehman Brothers 384

Toshoku 41

Tourres, Marie-Aimée 214

toxic mortgage assets 382

Tracker Fund of Hong Kong (TraHK) 276

trade

global supply chain 7, 11, 47, 66, 108, 146, 278–279, 281, 297, 322

trade barrier 94, 226

trade competitiveness 220

trade integration 311, 320, 323

trade surplus 47, 48, 51, 65, 166

transaction cost 8, 16, 47, 321, 329, 354, 400

transition risk 131

transparency 358, 359

Transparency International 82

Travellers Group 327

Trichet, Jean-Claude 122

Tripartite Agreement 154

Troubled Asset Relief Program (TARP) 385

Truman, Ted 41

Tsang, Donald 78

on HK dollar intervention 271–272

Turner, Philip 103

Twin Peaks Approach 354

Two-Tier Regulatory System (TTRS) 199

See also subprime crisis

Ukraine, IMF rescue loan 384

unemployment 307

migrant workers 308

unfettered finance 79, 185, 384, 400

Ungphakorn, Puey 131

Union Bank of Switzerland (UBS) 328

United Engineers Malaysia (UEM) 211

United Kingdom (U.K.) 5, 107, 254

banking system 328

Northern Rock 5, 120, 154, 241, 341, 373, 382, 390

Treasury 255

See also Bank of England, London Stock Exchange, Group of 7, Group of 20

U.K. Financial Services Authority 2, 341

U.K. Financial Services and Markets Act 357–358

United Nations 81

United States (U.S.) 16

Asian crisis 29, 227

AMF, opposition to 34, 38, 318

Asian economies, relationship 50, 78, 109, 112

banking: consolidation of 326

bank failures in 14

prudential negligence in 381

subprime mortgages 5, 14, 372, 381, 382, 387

China, trade with 47

crisis rescues: linked to U.S strategic interests 41, 43

Mexico 29, 156

South Korea 156

economic indicators: external debt 14

GDP 3

liabilities 3, 80, 107

savings gap 39

global trade 13, 109, 378

housing bubble in 14, 380–381, 383–387

government-sponsored enterprises 383

Japan, relations with 49–51, 53, 407

recession 6, 153, 187, 194, 257, 269, 345, 375, 380, 385

Washington Consensus 109–125

IMF 123, 227

yen–dollar rate 29, 39, 48, 49–50, 61–67, 88, 113, 145–146, 150, 173, 177, 210, 212, 225, 266, 269, 275, 322, 385

See also Bretton Woods institutions, Manila Framework, Plaza Accord, subprime crisis, U.S. Congress, U.S. dollar, U.S. Federal Reserve, U.S. Securities and Exchange Commission, U.S. Treasury

universal banking model 328, 401

universalism 121

See also International Monetary Fund, World Bank

U.S. accounting standards 355

U.S. Commodity and Futures Trading Commission 393

U.S. Congress 31, 112, 326, 383

Troubled Asset Relief Program (TARP) 385

U.S. dollar 5, 7, 11, 29, 49, 62, 79, 87, 109, 133, 150, 379

dollar zone 112, 149

in global equity market 314

See also individual currencies, Louvre Accord, Plaza Accord, yen–dollar exchange rate

U.S. Federal Reserve 38, 39, 45, 109, 112, 256, 266

Federal Funds rate 378, 380, 382

monetary policy 14

subprime crisis management 381, 388

See also Bernanke, Ben, Greenspan, Alan

U.S. President's Working Group on Financial Markets 390

U.S. Securities and Exchange Commission (SEC) 339, 358, 392

U.S. Treasury 5, 6, 110, 112

and the Asian crisis 30

and the subprime crisis 383

securities 3

Treasury Secretary: Geithner, Tim 1, 30, 33

Paulson, Henry, Jr 9, 355, 394

Rubin, Robert E. 13, 31, 112, 113, 331

Summers, Lawrence H. 1, 34, 38, 78, 375

Troubled Asset Relief Program (TARP) 385

value-at-risk (VaR) 347, 348

Van Leeuwen, Arthur Docters 2

Vietnam 91

See also Association of Southeast Asian Nations

Viravan, Amnuay 150, 151

Vittas, Dimitri 77

Vogel, Ezra F. 45

volatility

market 27, 79, 154, 181, 255, 281, 322–323, 334, 338, 342–343, 347, 405, 407

of yen–dollar exchange rate 7, 12, 48, 66, 67, 146

of yen carry trade 23

Volcker, Paul A. 350, 375

Wall Street 6, 20, 327, 336, 349, 400

See also NASDAQ, New York Stock Exchange, Wall Street, 349

Wang, Qishan 268

Washington Consensus 3, 109–125, 409

capital account liberalization 32

key recommendations of 110

See also International Monetary Fund, World Bank

Web of Debt 399

weighted average cost of capital (WACC) 174


White, William 351, 359

wholesale banking 14, 108, 330, 355, 387

originate-to-distribute 330, 335, 336, 387, 391

Wibulswasdi, Chaiyawat 22, 151

Williamson, John 109–110

window guidance 166, 183, 315

Wolf, Martin 350, 355, 362

Wolfensohn, Jim 83

Wolfowitz, Paul 124

won 181, 182, 173, p.175, table 7.7

Working Group on Transparency and Accountability 2

World Bank 2, 22, 32, 40, 76, 80, 82, 110, 156, 220, 385

and IMF, disagreement with 118

and Indonesia 236, 237

Asian Miracle: study 77, 111

review of 406–407

reform of China's financial system 289, 293

financial sector assessment program (FSAP) 352–354

See also Bretton Woods, Washington Consensus

World Financial Authority 125

World Trade Organization (WTO) 106, 110, 317

and China 107, 288

Wriston, Walt 327

Wu Jinglian 294

Xu Xiaonian 284

Yakcop, Nor Mohamed 214

yakuza 58–59

Yam, Joseph 78, 272, 273, 276

Yamaichi Securities 39, 59, 265

Yasukuni shrine 319

yen

endaka 51–53, 55

reasons for vulnerability 65–67

yen carry trade 11, 23, 59–62, 65, 171, 254, 275, 329, 384, 404

yen–Australian dollar carry trade 329

See also hedge funds

yen-denominated debt p.52, fig. 2.3, 61, 66

yen–dollar exchange rate 29, 39–49, p.50, fig. 2.1, 61–67, 88, 113, 145–146, 150, 173, 177, 210, 212, 225, 266, 269, 275, 322, 385

yen zone 11, 28, 78

Yongchaiyudh, Chavalit 34, 36

Yoshitomi, Masaru 127

Zeng Guofan 44

zero interest rate policy (ZIRP)

implications for exchange rate policy 404

in Japan 59, 376

in United States 376

Zhou Qiren 296

Zhu Rongji 288

Zoellick, Robert B. 124




© Cambridge University Press
printer iconPrinter friendly version AddThis