ABSTRACT
This chapter argues that the financial crisis in Asia was radically different from those that have plagued Latin American since 1982. In simple terms, the Asian crisis was not caused by excessively large fiscal and trade imbalances leading to inflation, speculative pressure on overvalued pegged exchange rates and financial sector collapse characteristic of crises in Latin America. Whereas the East Asian crisis had been characterized as a private rather than sovereign debt crisis, the greatest foreign exposure in Brazil was that of the public sector. Brazil, while it also sold assets in an attempt to forestall the crisis, the sales took the form of the privatization of large portions of the public sector which covered a substantial proportion of the current account financing needs and had, if anything, a positive impact on the balance sheets of the entities involved.
