Financial Crisis and Credit Crunch as a Result of Inefficient Financial Intermediation-with Reference to the Asian Financial Crisis /

This paper develops a model of private debt financing under inefficient financial intermediation. It suggests a mechanism that can generate the following sequence of events observed in the recent Asian crisis: A period of relatively low capital flow despite a steady improvement in economic fundament...

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Detalhes bibliográficos
Autor principal: Chen, Zhaohui
Outros Autores: Chan-Lau, Jorge
Formato: Periódico
Idioma:English
Publicado em: Washington, D.C. : International Monetary Fund, 1998.
coleção:IMF Working Papers; Working Paper ; No. 1998/127
Acesso em linha:Full text available on IMF
Descrição
Resumo:This paper develops a model of private debt financing under inefficient financial intermediation. It suggests a mechanism that can generate the following sequence of events observed in the recent Asian crisis: A period of relatively low capital flow despite a steady improvement in economic fundamentals (capital inflow inertia), followed by a fast buildup of capital inflow, and ended with a large capital outflow and domestic credit crunch. Unlike other models requiring large movements in fundamentals or asset prices to explain a financial crisis, this model can exhibit large credit/capital flow swings with moderate changes in the economic and market environment.
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Descrição Física:1 online resource (24 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
Acesso:Electronic access restricted to authorized BRAC University faculty, staff and students