The essays in this volume provide a comprehensive analysis by distinguished economists of the theoretical and policy issues associated with recent financial crises in emerging markets. These essays are complemented by the comments of an equally distinguished set of discussants. The essays were originally prepared for a conference sponsored by the Center for Pacific Basin Monetary and Economic Studies at the Federal Reserve Bank of San Francisco on September 23–24,1999. The conference brought together academics, central bankers, and other policymakers and researchers to review and compare the experiences of emerging market countries.

The conference was conceived with two purposes. First, it served as a natural sequel to a prior conference held at the Bank in September 1996, after the Mexican peso crisis of 1994–1995. The 1996 conference focused primarily on understanding the causes and policy responses to capital inflows and explaining why countries in Asia seemed different from Mexico and less vulnerable to currency and banking crises. At the time it appeared that East Asian countries had achieved a more successful approach to capital flow and exchange rate management. Since then, we have learned (or have been reminded) that all countries, even fast–growing Asian economies, can experience financial crises.

A second purpose of the conference was to carry on the Bank's Pacific Basin research program. Since 1974, the program has promoted cooperation among central banks in the Pacific Basin and sponsored research on major monetary and economic policy issues in the region.