Why was Asia Resilient? Lessons from the Past and for the Future

2014 ◽  
Vol 05 (02) ◽  
pp. 1450002 ◽  
Author(s):  
Phakawa Jeasakul ◽  
Cheng Hoon Lim ◽  
Erik Lundback
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Initial Conditions ◽  
Credit Expansion ◽  
Risk Premiums ◽  
The Face ◽  
External Conditions ◽  
The Global Financial Crisis ◽  
Asset Quality ◽  
The Right

Asia proved to be remarkably resilient in the face of the global financial crisis, but why was its output performance stronger than that of other regions? The paper shows that better initial conditions — in the form of lower external and financial vulnerabilities — contributed significantly to Asia's resilience. Key pre-crisis factors included moderate credit expansion, reliance on deposit funding, enhanced bank asset quality, reduced external financing, and improved current accounts. These improvements reflected the lessons from the Asian financial crisis in the late 1990s, which helped to reshape both public policies and private sector behavior. Looking ahead, Asia is in the process of adjusting to more volatile external conditions and higher risk premiums. By drawing the right lessons from its pre-crisis experiences, Asia's economies will be better equipped to address new risks associated with increased cross-border capital flows and greater integration with the rest of the world.

Taking Credit

2017 ◽  
Vol 69 (4) ◽  
pp. 640-675 ◽  
Author(s):  
John S. Ahlquist ◽  
Ben W. Ansell
Keyword(s):  
Global Financial Crisis ◽  
The United States ◽  
Left Wing ◽  
Credit Expansion ◽  
Relative Consumption ◽  
Long Run ◽  
Current Consumption ◽  
The Face ◽  
Political Left ◽  
The Global Financial Crisis

Several recent studies link rising income inequality in the United States to the global financial crisis, arguing that US politicians did not respond to growing inequality with fiscal redistribution. Instead, Americans saved less and borrowed more to maintain relative consumption in the face of widening economic disparities. This article proposes a theory in which fiscal redistribution dampens the willingness of citizens to borrow to fund current consumption. A key implication is that pretax inequality will be more tightly linked with credit in less redistributive countries. The long-run partisan composition of government is, in turn, a key determinant of redistributive effort. Examining a panel of eighteen OECD democracies, the authors find that countries with limited histories of left-wing participation in government are significantly more likely see credit expansion as prefisc inequality grows compared to those in which the political left has been more influential.

A Past Returned, A Future Deferred

2020 ◽  
pp. 163-184
Author(s):  
Maya Nadkarni
Keyword(s):  
Financial Crisis ◽  
International Monetary Fund ◽  
Global Financial Crisis ◽  
Fiftieth Anniversary ◽  
Right Wing ◽  
Economic Prosperity ◽  
Economic Crises ◽  
Twentieth Anniversary ◽  
The Global Financial Crisis ◽  
The Right

This chapter examines how the experience of the crises fueled renewed complaints that remains of socialism prevented Hungarians from attaining a “normal” life of political civility and economic prosperity. It talks about Hungary's twentieth anniversary of 1989, in which the memory of the transition now only inspired the lament that “communism never ended.” With the anniversary of the events in 1989, new political and economic crises appeared to threaten the success of Hungary's postsocialist transformation. The chapter also narrates events on the fiftieth anniversary of the 1956 revolution in 2006 when the right-wing demonstrators protested the socialist-led government and had admitted to lying to win the election. It also discusses the global financial crisis in 2008 that hit Hungary with disproportionate force that lead to the first-ever International Monetary Fund bailout of an EU country.

scholarly journals Market Discipline in the Interbank Market: Evidence from an Emerging Country

2021 ◽  
Vol 18 ◽  
pp. 1028-1037
Author(s):  
Dung Viet Tran ◽  
Chi Huu Lu
Keyword(s):  
Financial Crisis ◽  
Commercial Banks ◽  
Global Financial Crisis ◽  
Banking System ◽  
Market Discipline ◽  
Interbank Market ◽  
Empirical Results ◽  
Emerging Country ◽  
The Global Financial Crisis ◽  
Asset Quality

This study provides one of the first evidence of the market discipline in the interbank market of the Vietnamese banking system after the global financial crisis. Based on the data of 19 commercial banks listed in Vietnam from 2010 to 2019, our empirical results suggest a weak interbank discipline in the Vietnamese banking system. Banks seem to be interested in the liquidity ratio of their fellows, especially for smaller banks, whereas they pay more attention to asset quality in the case of larger banks. We believe our study is of interest to regulators and policymakers in Vietnam

scholarly journals Relationship between Current Account Deficit and Credit Volume after the Global Financial Crisis: The Case of Turkey

2014 ◽  
Author(s):  
Sinem Yapar Saçık ◽  
Ebubekir Karaçayır
Keyword(s):  
Financial Crisis ◽  
Current Account ◽  
Global Financial Crisis ◽  
Current Account Deficit ◽  
Paper Analysis ◽  
Current Account Balance ◽  
Credit Expansion ◽  
Credit Mechanism ◽  
Short Run ◽  
The Global Financial Crisis

An important macroeconomic variable, current account deficit as percentage of gross domestic product is considered as an indicator of an economic crisis when it is above 5%. In the economies where current account deficit is a problem, source of current account deficit should be determined for the solution. In the case of an interaction between credit expansion and current account, policies using a credit mechanism can be applied to stabilize the current account balance. In order to determine the relationship between current account deficit and credit volume before and after the financial crisis, visual graphics based on data will be utilized. This paper analysis the cointegration, long and short run causality relationship between current account deficit and consumer credits for Turkey over the period 2004Q3-2013Q3. The results of Johansen cointegration test indicate a cointegration between these variables. The empirical results show that there is bidirectional long and short run casuality relationship among variables. After the financial crisis of 2008, the increase in credit expansion increased domestic consumption depending on imports causing deterioration in current account deficit. There are difficulties of low finance qualities of this current account deficit and the realization of structural transformation in favor of exports in short term. Targeting a continuing economic growth increases energy dependency and import of investment goods, so puts credit mechanism policies forward to fight with current account deficit. Limiting the credit volume more than necessary to reduce current account deficit can worsen the various macroeconomic variables.

scholarly journals Italy

2020 ◽  
Vol 20 (238) ◽  
Author(s):  
Keyword(s):  
Financial Crisis ◽  
Euro Area ◽  
Financial Regulation ◽  
Global Financial Crisis ◽  
Financial System ◽  
Financial Sector ◽  
Assessment Program ◽  
Substantial Progress ◽  
The Global Financial Crisis ◽  
Asset Quality

The Financial Sector Assessment Program (FSAP) took place against the backdrop of an ongoing recovery of the financial system. Since the global financial crisis (GFC), financial regulation has been substantially enhanced by the implementation of euro area-wide (EA-wide) regulatory and supervisory frameworks. Furthermore, the Italian authorities have implemented important measures that improved governance, facilitated capitalization, raised prudential requirements, and improved asset quality. In response, Italian banks have made substantial progress tackling legacy non-performing loans (NPLs) and improving solvency ratios.

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