Publication

This paper describes how in the context of financial liberalization and deregulation, weak prudential regulation and institutions created substantial vulnerabilities in various Asian countries in the lead-up to the 1997/98 financial crisis. The author states that in spite of all the efforts made at regulatory upgrading, prudential regulation continues to seriously slow the process of financial liberalization. The paper explains how the process has remained perverse in most parts of Eastern Asia, mainly due to political-economic reasons and implementation failures in countries in a state of crisis.