The early stages of the 1990s turmoil in Asian financial markets were described as ‘a few little glitches in the road’.2 Now it is recognized as one of a series of major financial crises to have hit the world economy in the past decade. The main features were:

● private capital markets withdrew their support from countries that for several years had been recipients of large capital inflows;

● the defensive package of foreign exchange market intervention, sharp rises in interest rates and selective controls proved inadequate to avert devaluation of some formerly fixed exchange rates;

● large unhedged foreign exchange positions and weak banking and financial systems contributed to vulnerability and sharply constrained the authorities’ room for manoeuvre;

● the trauma quickly spread out from its original locus to affect exchange rates and other asset prices in the region (and for a short while, in major industrial countries as well);

● large, multilateral official rescue packages had to be mobilized; and ● the events generated calls (both within the region and beyond) for stronger

preventative arrangements to reduce the likelihood and severity of future outbreaks.