Malaysian financial system and the Asian financial crisis

Anwar, Sajid, and Gupta, Desh (2004) Malaysian financial system and the Asian financial crisis. Global Business and Economics Review, 6 (2). pp. 191-209.

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The last decade has witnessed three distinct crises: 1992-93 European crisis, 1994-95 Mexican crisis and 1997-98 Asian crisis. The Asian financial crisis raised serious concerns about the vulnerability of the Malaysian financial system. Although the Malaysian economy as responded well to capital controls and other measures adopted by the government and Bank Negara Malaysia, concerns remain regarding their long-term viability. This paper attempts to explain the reasons for the success of the restructuring of the Malaysian financial system. In addition, the paper argues that, given the high level of competition faced by Malaysia's export oriented industries, especially from China, long term economic growth will require Malaysia becoming a regional financial centre. This would require Malaysia to remove all capital controls and allow its currency to fluctuate freely. Instead of relying on capital controls, the rate of accumulation of short-term foreign debt on be better controlled by a tax on short-term capital inflows.

Item ID: 6366
Item Type: Article (Research - C1)
ISSN: 1745-1329
Keywords: financial system; Malaysian financial system; Malaysia; Asian financial crisis; Malaysian economy; economic growth; short-term capital inflows; capital controls; foreign debt; tax
Date Deposited: 09 Sep 2010 23:09
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140210 International Economics and International Finance @ 100%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9199 Other Economic Framework > 919999 Economic Framework not elsewhere classified @ 100%
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