ABSTRACT
INTRODUCTION1 The financial crises of 1997 and 1998 reminded everyone in the Asia Pacific region
that sustained economic development requires careful attention to its foundations. The institutions of several East Asian economies proved inadequate, especially in terms of financial sector management. These weaknesses, combined with great instability in international capital markets, led to a severe and widespread economic downturn in activity in the region, shaking confidence in the prospects for further rapid improvements in living standards as well as in the prospects for effective economic cooperation in the Asia Pacific.
