In summary, the Asian economies clearly exhibited several growing weaknesses in the
mid-1990s, including rapidly-expanding and under-supervised financial systems, large short-term
capital inflows financing increasingly weak investments, and a sharp slowdown in the growth of
export revenues. The key issue is whether these problems add up to a crisis of the magnitude that
was seen in late 1997 and 1998. Banking systems in Asia had clearly been opened up too quickly,
but by most objective measures, the banks were not substantially weaker than those in many other
emerging markets.
In summary, the Asian economies clearly exhibited several growing weaknesses in themid-1990s, including rapidly-expanding and under-supervised financial systems, large short-termcapital inflows financing increasingly weak investments, and a sharp slowdown in the growth ofexport revenues. The key issue is whether these problems add up to a crisis of the magnitude thatwas seen in late 1997 and 1998. Banking systems in Asia had clearly been opened up too quickly,but by most objective measures, the banks were not substantially weaker than those in many otheremerging markets.
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