# data[].attributes.body
-Governments need to be more concerned about their exchange rate policies and their reserves.
-Governments should not think that their countries are immune to such economic calamities.
-As individuals we should makes choices independently,i.e. avoid herding, in this case in the stock markets.
-When a country is affected, it is highly probable that other countries might suffer too.
-Countries should be careful when liberalising their financial systems as lack of proper knowledge and readiness will lead to disaster.

# data[].attributes.body
1) Political and economic environment transparency is highly important to curb unexpected changes.
2) Domestic allocation of borrowed foreign resources need to be used efficiently and effectively
3) Governments should ensure additional borrowing strategies other than short term borrowing to be a substantial portion of capital inflows
4) Lack of payment of large amounts of loans lead to the collapse of banking system if inefficiently monitored
5) Corporate debt in foreign currencies can lead to vulnerability of very expensive payments when currencies drop in value or depreciate
6) Exchange rate regimes are extremely difficult to maintain
7) Huge fiscal deficits lead to inefficiency in the financial system
8) An imbalance between liabilities dominated in a foreign currency and assets largely dominated by domestic currency lead to huge currency mismatches

# data[].attributes.body
i1: Hold less debt in foreign currencies

Over-borrowing in foreign currencies, mainly from the corporate sector, helped give way to crisis in 1997. Lower ratios of external debt to GDP and less corporate short-term external debt exposure are likely to help Asian economies this time around. Still, some credit and capital have been misallocated, particularly in property markets. This lead to credit crunch and interest rates were increased dramatically.

2: Allow exchange rates to be more flexible

In 1996, most Asian currencies were pegged to the U.S. dollar, forcing central banks to draw on their limited foreign-currency reserves to defend them. Today, Asian currencies have far more flexibility. In 1997, the hardest-hit economies of Thailand, Indonesia, Malaysia and South Korea saw their currencies lose more than 50% of their value against the dollar.

3: Build up foreign-exchange reserves

Asian policy makers swallowed a bitter pill back in 1997, when several countries were forced to turn for a bailout to the International Monetary Fund. The IMF imposed austerity measures that critics said helped accelerate the crisis and toppled governments. In the years since, Asian economies worked to build up their foreign-exchange reserves. However, Malaysia was the only country among those who were hit by the crisis that did not surrender to the IMF and tried to recover on their own. This measure prevented international pressure and country over internal matters of the country and stay politically stable.

4: Don’t run large current-account deficits

Unlike 1997, when seven out of 10 Asian countries were running deficits, most countries in Asia today have current-account surpluses. That has helped offset capital outflows. And since most countries in Asia are net importers of commodities, falling commodity prices could be a benefit for the region overall, helping boost trade surpluses and strengthen finances.

5: Improve banking oversight and coordinate policy with other countries

Since 1997, Asian countries have agreed to a multilateral currency swap arrangement that allows them to manage short-term liquidity problems. In addition, many countries have increased transparency, posting reports about monetary moves online and putting checks on fiscal policy.

# data[].attributes.body
countries should, where possible, consider a combination of short-term and long-term measures. Immediate and short-term policy responses are required to ensure that (i) the financial crisis is contained (ii) that confidence in financial systems are restored, for instance by providing guarantees, strengthening the balance sheet of banks and by sharpened supervision, and that  (iii) the impact on the real economy is minimized.

# data[].attributes.body
The global financial crisis is impacting almost all developed and developing countries. Slower growth is forecasted for most emerging and developing economies. Developed country economies are contracting and this may impact foreign aid contributions, FDI, remittances, and global trade. Highly donor dependent countries are especially vulnerable to aid cuts. Currency devaluations in developing countries will result in higher domestic prices of imported goods, including drugs. These price increases in local currency units may decrease access to essential medicines, as well as increase the pressure on potentially shrinking government health budgets.  The timing of the current crisis, on the heels of the food crisis, puts the poor at even greater risk.

# data[].attributes.attachment_link.readable_text
Thailand had a reputation as the world's fastest-growing country between 1987 and 1996, with an average of 9.5 per cent growth per annum. In that same decade , investment by financial institutions, especially financing companies, underestimated their proficiency and potential. Although their portfolios were focused on lending on investments, many loans inevitably involved speculative investment like real estate, and individual consumption like car leasing and stocks. The value of these loans increased 17 times and accounted for 54 per cent of total loans in 1996.

There was a trendy towards hasty lending in the real estate and stock sectors. These were growing on building prices rather than on creating productivity. Investors crowded in, mainly buying property for short-term speculation, not as long-term investments, causing huge artificial demand and creating a bubble economy.

Housing, land and share prices were spun much higher without a good foundation to support their actual value. When investors were faced with the economic downturn, their prices fell sharply. So borrowing money to invest in such assets led to severe damage and enormous capital losses. The debts could not be repaid financial institutions were crippled.

This reckless lending was not thoroughly analysed in accordance with the code of credit ethics. Finance companies competed over profitable loan opportunities.

Most finance companies failed to heed their own plans for dealing with the inevitable impact of lending too much, whether reserving for non-performing loans, reducing capital to cope with financial damage or increasing capital to strengthen their financial liquidity.

Amid low interest rates on foreign loans and relatively constant exchange rates (pegged with the global basket of currencies) at that time, investors were absolutely confident in borrowing from abroad, believing they were facing only low risk.

The baht crisis was significantly prompted by the financial liberalisation to conform to globalisation. A flexible exchange rate really is preferable to a constant exchange rate because it allows better control over huge loans from overseas. But the floating exchange rate was adopted too late after the bubble economy collapsed. This impacted on the baht, causing more unprecedented depreciation and spreading the detrimental effect across Asia.

Without a sufficient economic basis, efforts to bolster Thailand's high economic growth rate or that of any economic sector were bound to be unprofitable and ultimately ruinous, as demonstrated by the 1997 economic crisis.

Sutipunt Bongsununt

# data[].attributes.attachment_link.title
Were lessons ever learned from 1997 financial crisis? - The Nation

# data[].attributes.attachment_link.description
When talking about the 1997 economic crisis, people often think of July 2, 1997, when the Bank of Thailand unpegged the baht and adopted a floating exchange rate. As a result, the baht was severely devalued, from Bt25/US dollar to Bt56/dollar by January 1998.

# data[].attributes.headline
5 things learnt from 1997 financial crisis

# data[].attributes.subject
5 things learnt from 1997 financial crisis

# data[].attributes.body
https://www.google.com.my/amp/s/www.wsj.com/amp/articles/BL-263B-5789%3fresponsive=y

#1: Hold less debt in foreign currencies

Over-borrowing in foreign currencies, mainly from the corporate sector, helped give way to crisis in 1997. Lower ratios of external debt to GDP and less corporate short-term external debt exposure are likely to help Asian economies this time around. Still, some credit and capital have been misallocated, particularly in property markets. Asia’s Achilles heel is its domestic debt-to-GDP ratios which are higher in many countries than in 1996, said Rob Subbaraman, an analyst at Nomura. “This could lead to a credit crunch when interest rates rise in Asia,” he added, though that’s unlikely to happen this year.

#2: Allow exchange rates to be more flexible

In 1996, most Asian currencies were pegged to the U.S. dollar, forcing central banks to draw on their limited foreign-currency reserves to defend them. Today, Asian currencies have far more flexibility. In 1997, the hardest-hit economies of Thailand, Indonesia, Malaysia and South Korea saw their currencies lose more than 50% of their value against the dollar, DBS said in a research note. Over the past year, however, “their purported ‘thrashing’ has put them down by 15%.” Of course, the U.S. Federal Reserve may still decide to raise interest rates at its next meeting in September, putting further pressure on currencies like the Indonesian rupiah. That could hurt companies that borrowed in dollars and add stress to weaker, commodities-exporting countries that are suffering from lower prices for coal, ores and oils and rising non-performing loans.

#3: Build up foreign-exchange reserves

Asian policy makers swallowed a bitter pill back in 1997, when several countries were forced to turn for a bailout to the International Monetary Fund. The IMF imposed austerity measures that critics said helped accelerate the crisis and toppled governments. In the years since, Asian economies worked to build up their foreign-exchange reserves as a buffer and can cover around 15 months of imports, according to Morgan Stanley. More liquid domestic bond markets also provide space for Asian markets to borrow and finance spending, Bank of America-Merrill Lynch said in a report.

#4: Don’t run large current-account deficits

Unlike 1997, when seven out of 10 Asian countries were running deficits, most countries in Asia today have current-account surpluses. That has helped offset capital outflows. And since most countries in Asia are net importers of commodities, falling commodity prices could be a benefit for the region overall, helping boost trade surpluses and strengthen finances, says Nomura. Indonesian Trade Minister Tom Lembong said in the short term that may mean letting the markets do their work. The rupiah’s depreciation, for example, has helped Indonesia rectify its trade deficit, bringing the country closer to closing a persistent current-account deficit. One problem it will continue to face, however, is the fallout from the sharp slowdown in demand for exports, which have led to stockpiles of some commodities. In other countries, a decline in the working age population will weigh on future GDP  growth, while poorly targeted investment in manufacturing that has failed to increase productivity will continue to limit the potential for trade expansion.

# data[].attributes.body
countries should prioritize a number of measures for further domestic financial sector development

# data[].attributes.body
Recommendations
1) Make Exchange Rates Flexible
- a fixed exchange rate can have the effect of decreasing the natural volatility of currency fluctuations, thereby decreasing the risk premiums charged by foreign lenders and cheapening the cost of borrowing funds from abroad.

Others
https://www.mof.go.jp/english/about_mof/councils/customs_foreign_exchange/report/e1a703j.htm