Globalization, Politics, and Financial Turmoil: Asia's Banking Crisis

by Shanker Satyanath

• ISBN13: 9780521854924
• ISBN10: 052185492X
• Format: Hardcover
• Copyright: 2005-12-22
• Publisher: Cambridge University Press

Summary

In a world where capital moves freely across national borders, developing countries have increasingly been subjected to devastating financial crises caused by the sudden withdrawal of foreign capital. How do such crises develop? This book focuses on a novel causal path: that of miscommunication. By examining the determinants of Asia's financial crisis of 1997-98, it demonstrates why developing democracies are exceptionally vulnerable to breakdowns in communication between financial officials and the chief executive and outlines the disastrous consequences of such breakdowns.

Table of Contents

Figures and Tables	x
Preface	xi
1 Introduction	1	(19)
2 Bank Regulation in the Debate over Capital Flow Liberalization	20	(8)
3 The Signaling Argument	28	(20)
4 Incredible Signaling in Democracies: The Cases of Thailand, South Korea, and the Philippines	48	(44)
5 Unorthodox Solutions to the Signaling Problem: The Cases of Malaysia and Indonesia	92	(21)
6 Orthodox Solutions to the Signaling Problem: The Cases of Singapore and Hong Kong	113	(17)
7 Some Concluding Remarks	130	(5)
Appendix I The World Bank's Evaluation of Bank Regulatory Environments	135	(2)
Appendix II Verbal Description of the Equilibrium with Two Signalers	137	(2)
Appendix III Formal Proof of Equilibrium with Two Signalers	139	(2)
Bibliography	141	(12)
Interviews by the Author	153	(2)
Index	155