ABSTRACT
The floating of the Thai baht on 2 July 1997 catalysed a contagious sequence of financial meltdowns. The global panic unleashed by the Russian default battered other Group of Eight (G8) countries such as Canada, and threatened to paralyse the financial system of the world's most powerful and superbly performing economy, the United States. The failure of the world's leading national authorities, international institutions, or market actors to foresee its outbreak, predict its course, or confidently contain its cumulative devastation reinforced the collective realisation that the international financial economy of the twenty-first century was very different in kind than that which had proceeded it. On 17 August 1997, the crisis spread to Europe, when, three weeks after the latest infusion of financial support from the International Monetary Fund, the G8's newest member Russia was forced to devalue its currency and default on its loans. The chapter also presents an overview of the key concepts discussed in this book.
