ABSTRACT
The impressive record of growth and development sustained by the economics of East Asia throughout the 1980s and 1990s came to a sudden hall during die second half of 1997, when the financial crisis struck Thailand and then spread to the rest of Southeast Asia, to South Korea, and beyond. The crisis (or series of crises) did not remain simply a matter of financial difficulties or their economic effects, but had a significant impact on the political sphere, in particular by posing a threat to the stability of the political institutions of Indonesia and Malaysia. The various diagnoses of the crisis, and the remedies prescribed lor it, both at the time and since, have revealed the diverse interests of the individuals and institutions that the crisis affected. These include, among others, US and Japanese financial institutions, to the extent that their responses did much to shape the differing policies of the US and Japanese governments respectively. In the end. however, the "contagion" effects of the crisis, which spread far beyond the region, alerted lenders and borrowers alike to the dangerous consequences of failing to cooperate.
