Preventing and Managing Crises ― Lessons from Past Crises for Developing Asia

During their financial crisis of 1997-98, Asian countries learned significant lessons, often at the behest of international creditors such as the United States. And they were able to productively utilize them, and thus escape the worst effects of the 2008-10 global crisis. The nine papers presented in this work arrive at three major lessons: 1) Countries should establish long term "economic robustness" through policies such as limiting currency mismatch on debt, accumulating sufficient foreign exchange reserves, and preventing excessive domestic credit creation. 2) Countries should leave room for stabilization policies, such as aggressive monetary easing combined with rapid tough recapitalization (or even the closure of damaged banks). 3) Countries should strive for the accumulation of foreign exchange reserves within a region, or even globally, in order to provide for self-insurance in the case of crisis. As chapter five, Policy Advice and Actions during the Asian and Global Financial Crises, points out however, the United States refused to follow the second lesson and force insolvent financial institutions to undergo restructuring. They thus established the reality of banks "too big to fail." This collection of papers is appropriate for professional economists in public policy or academia. Annotation c2014 Book News, Inc., Portland, OR (booknews.com)

Changyong Rhee has been director of the Asia and Pacific Department at the International Monetary Fund since 2014. Rhee acts as spokesperson on economic issues and heads its Economics and Research Department, which carries out policy research on development challenges facing Asia and the Pacific. He has over 20 years experience as an economist, financial advisor and academic. Previously, he held a range of senior public policy positions in Korea. He is Secretary General and Sherpa of the Presidential Committee for the G-20 Summit of the Republic of Korea. He served as the Vice Chairman of the Financial Services Commission as well as chairman of the Securities & Futures Commission. In the public sector, he has provided extensive policy support to the Korean government, including serving as a member of the National Economic Advisory Council in the Office of the President, and advisor to the Bank of Korea. In the private sector, he has advised Shinhan Bank and Woori Investment and Securities Company, among others. He has also been the Director of the Financial Market think tank, the Korea Fixed Income Research Institute. As an academic, he has served as a Professor of Economics at Seoul National University, with numerous research papers published in leading economic journals.

Adam S. Posen, the President of the Peterson Institute for International Economics, has specialized in macroeconomic and monetary policy, resolution of financial crises, central banking issues, and the economies of Western Europe, Japan, and the United States. Posen brings a distinctively global perspective to macroeconomic policy analysis and forecasting. He has written about the financial and economic challenges faced by the European Union following the adoption of the euro and the lasting impact of Japan's economic crisis of the 1990s, while providing counsel directly to the Japanese government in Tokyo. Leading up to the successful London G-20 summit of 2009 during the global financial crisis, he consulted for the UK Cabinet Office.