Asian financial crisis

Conditions at the time

Foreign-currency funding and vulnerabilities in the financial sector were exposed to shifts in confidence.

How events unfolded

In the summer of 1997, Thailand’s crisis spread to regional currencies, banks and businesses.

Stakeholders and impacts

National governments, financial institutions, foreign creditors and international organizations responded.

Information available at the time

The US Federal Reserve also reviewed bank exposures and funding risks.

Findings confirmed later

Country-specific stabilization measures followed, including rollover of South Korea’s short-term debt and conversion to medium-term maturities.

Alternative interpretations and limitations

Exchange-rate regimes and debt structures differed across countries, so the same causes and policy effects should not be applied uniformly.

Interpretation using later sources

Strong pre-crisis growth masked short-term foreign-currency borrowing and supervisory weaknesses. Responses also evolved: as markets stabilized, some interest-rate and fiscal policies eased to support growth. ASSETCASTING interpretation: A single tightening-and-recovery story misses policy changes and national differences. Compare debt currencies and maturities, financial institutions and the sequence of responses, not growth rates alone.

Evidence coverage through 2013-11-22 · Sources checked 2026-10-14

• Asian Financial Crisis ↗

Related events and periods1

• Global economic integration, IT investment, and recurring financial crises →

  An event or period whose recorded start falls within this editorial interval. This does not establish that it caused or represents the characteristics of the era, nor guarantee that the entire period falls within the interval.