ABSTRACT
The Asian Meltdown serves as a lesson for emerging economies, that speculation in currencies and securities could tumble banks and securities markets and threaten the entire economy. International speculators had fixed their eyes on the Hong Kong Stock Exchange. The collapse of the planned economies showed that too much direct governmental intervention could result in economic stagnation. The first economic crisis came by the end of the 1920s and haunted the world until the early 1930s. Both intervention and non-intervention are double-edged swords. The driving force of the current globalization is international capital flow. Capital flow depends on two essential factors: currency and banks. By January 1998, currencies and securities markets of some South-East Asian countries fell to another historical low. This was triggered by the combination of several factors. For instance, some of these countries were experiencing a debt crisis. These factors resulted in turmoil in the securities markets of these countries. The financial turmoil lasted until January 1998.
