The impact of the Asian crisis on European banks

Abstract

The world economy, especially the international financial system has been strongly hit by the 1997 East Asian financial crisis. The short-term international lending of banks to these crisis-hit East Asian countries has been one of the important reasons for the financial crisis. Of the approximately USD 330bn in total net capital inflows to the Asian emerging markets during 1990-1996, more than USD 220bn came from international commercial banks. International banking lending has been the key to the capital account of the balance of payment of these East Asian countries, thus playing an important role in the crisis.