ABSTRACT

This chapter discusses the prudential regulation of financial institutions in Indonesia, Malaysia and Thailand (henceforth ‘the ASEAN3’) in light of the financial crises of 1997–8. All three countries implemented elaborate systems of prudential controls well before the onset of the crises. In Thailand and Indonesia the controls clearly proved to be inadequate. In comparison, Malaysia’s financial system appears to have been relatively robust. However, its crisis is not yet over, and the suspicion that the authorities may have papered over major problems has not yet been disproved.1