Lessons from the East Asian financial crisis: A financial sector perspective

This paper considers explanations for the financial crisis which has traumatised a number of Asian economies in the last two years. The paper highlights the recent literature on the causes of the crisis and points out in particular the role of financial markets in corporate governance and the consequent importance of financial regulation in the affected economies. It argues that financial markets did not play an effective role in controlling firms and hence argues for policy actions which will ensure that such controls are exerted more rigorously in the future. (C) 2001 Elsevier Science Ltd. All rights reserved.