The monetary policies that the Asian crisis countries were required to adopt also continue to be controversial
but less so. All countries initially sharply increased their interest rates to help stabilize their economies
and arrest the free fall of their currencies.71 Although many agree with the analysis of Jason Furman
and Joseph Stiglitz (1998) that the increases in interest rates further weakened banks and the real economy,
the truth is that large parts of the fi nancial systems in these economies were already insolvent by the time
that interest rates rose and not positioned to support the resumption of growth. Moreover, the peaks in
interest rates were in either the fi rst or second quarter of 1998, and rates began to decline once conditions
stabilized somewhat.72