Speeli
  • Facts
  • Geography
  • Health
  • History
  • Nature
  • Psychology
  • Science
  • Wiki
Speeli
  • Facts
  • Geography
  • Health
  • History
  • Nature
  • Psychology
  • Science
  • Wiki
  • Stock Market

What caused the Asian Financial Crisis of 1997?

  • Alex Williams
  • April 8, 2021
  • 2 minute read
Knowledge
  1. Surge in capital inflows

    One of the biggest reasons for Asia’s financial crisis was the surge in capital inflows. It was the primary aspect that created panic within the entire Asia. This panic further led many investors to pull out their money, which resulted in a financial crisis.

  2. The devaluation of currencies

    The two of the robust currencies of Asia, including the Japanese ‘yen’ and the Chinese ‘renminbi’, was devalued to a large extent. This affected the export revenues immensely and brought crisis into Asia. (See Why do countries devalue their currency?)

  3. Weakness of the Asian financial systems

    Asia’s financial system was not much organized or systematic as they were prone to the financial crisis. The biggest weakness of their economic systems was that they did not include any incentives for effective risk management.

  4. The collapse of the Thai baht

    Many investors started assessing the financial systems in Thailand just after they realized and witnessed the collapse of the Thailand currency ‘baht’.

  5. An acute decline in semiconductor prices

    Semiconductors’ prices slump adversely affected export revenues. It was because Asia was extensively dependent on the export of semiconductors.

  6. Inefficient use of capital inflows

    The inefficient utilization of capital inflows was one of the predominant reasons that caused the financial crisis in Asia. This inefficient usage led to an increase in the number of current account defects. It impacted on the well-being of Asia’s economy adversely. Thus, it resulted in a crisis.

  7. Interruption in credit flows

    The whole of Asia experienced an abrupt economic slowdown when several Asian banks have to deal with bankruptcies of borrowers, due to which the whole of Asia undergone the disruption in cash flows.

  8. Underestimating economic weakness

    Some countries predicted the possibility of experiencing economic weakness, but many countries ignored and underestimated the warning signs that were showing up the occurrence of this situation. (See Summary of the Syrian Crisis)

  9. The fixation of exchange rates

    Some borrowers were immensely affected as they were misguided about the exchange rates and were given a false sense of security. Subsequently, those borrowers lost plentiful money when devaluation in Asian currencies happened.

  10. Asset price inflation

    The price of the assets was inflated to the levels that were not sustainable as the capital was effortlessly available at much lower rates than before.

  11. Lack of transparency

    Many Asian countries were not able to see the warning signs and hence, lacked knowledge about the actual state of their economy. Being unable to comprehend the current situation led to the financial crisis.

Total
0
Shares
Share 0
Tweet 0
Pin it 0
alex1
Alex Williams

Alex Williams is a PhD student in urban studies and planning. He is broadly interested in the historical geographies of capital, the geopolitical economy of urbanization, environmental and imperial history, critical urban theory, and spatial dialectics.

You May Also Like

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Trending Posts
  • JAN23 How to Preserve a Live Starfish 1
    How to Preserve a Live Starfish?
    • May 16, 2023
  • JAN23 Which is Not a Characteristic of Enzymes 1 2
    Which is Not a Characteristic of Enzymes?
    • May 8, 2023
  • JAN23 What are the Things You Need to Survive 1 3
    What are the Things You Need to Survive?
    • May 6, 2023
  • JAN23 How are Lake Superior Agates Formed 4
    How are Lake Superior Agates Formed?
    • April 25, 2023
  • JAN23 Why do People Wear Little Spoon Necklace 1 5
    Why do People Wear Little Spoon Necklace?
    • April 1, 2023
  • JAN23 What are Generalist Species Examples 4 6
    What are Generalist Species Examples?
    • April 1, 2023
About

Speeli’s mission is to summarize the internet’s knowledge into Speeli summaries. By doing so we will make the process of finding information extremely fast.

Top Stories
  • JAN23 What is Extrusive Volcanism 1
    What is Extrusive Volcanism?
    • May 20, 2023
  • JAN23 What is Difference Between Fission and Budding 2
    What is the Difference Between Fission and Budding?
    • May 19, 2023
  • JAN23 What are Drawbacks Of Urbanization
    What are Drawbacks of Urbanization?
    • May 9, 2023
  • JAN23 What Simple Machine is a Broom
    What Simple Machine is a Broom?
    • April 29, 2023
  • JAN23 How Long is an Eon
    How Long is an Eon
    • April 26, 2023
  • JAN23 Why Do Bees Eat Honey 1
    Why Do Bees Eat Honey?
    • April 26, 2023
Speeli
  • DMCA
  • Privacy Policy
  • Terms of Service
  • What is Speeli?
Simplifying the Internet, One Summary at a Time!

Input your search keywords and press Enter.