ABSTRACT
The financial crisis in East Asia has had a far-reaching impact on the financial and corporate sectors of the affected countries. It has caused systemic insolvency problems for commercial banks and non-bank financial institutions as well as for highly indebted corporations. The crisis has also provided an opportunity for countries to improve prudence and efficiency in financial intermediation and enhance corporate governance to enable better resource allocation and allow the private sector to lead economic development. Among policymakers, international financial institutions, private organisations and academics, views are converging that the crisis was the result of interactions between massive capital flows and weak domestic institutions, notably in the financial and corporate sectors. As a result discussions are proceeding on how domestic financial and corporate systems can be improved to maximise the benefits of, and reduce the risks posed by, global economic and financial integration.
