ABSTRACT
The extraordinary turbulence in East Asia over the past two years has sparked a wide-ranging debate on the causes of the crisis, lessons to be learned and the desirable architecture of the global financial system. Among policy makers, international financial institutions, private organisations, and in academic circles, views are converging that the East Asian crisis was caused by interactions between massive capital inflows and outflows and weak domestic institutions, notably in the financial sector, in the emerging market economies. As a result, discussions are proceeding on how the international financial system and the domestic institutional underpinnings could be strengthened to maximise the benefits of, and reduce the risks posed by, global economic and financial integration.
