the standard Washington view attributes the asian crisis to inappropriate macroeconomic policy during the 1990s, made worse by inept management of the initial depreciations in 1997. In contrast, redelet and sachs and wade and veneroso argue that the crisis began with a mild panic that had no real foundation and was made serious only by IMF pressure to increase interest rates and to close down bank. Krugman presents a third theory based on international bank behavior,arguing there was a pangloss equilibrium that caused a babble in asset prices. in his view, the asian panics had their origins in implicit guarantee offered by government and believed by investors.