Lessons for the International Financial System

  • Manuel Guitián

Abstract

The currency turmoil in Asia—which now has extended to Russia as well—has been aggravated by a confidence crisis feeding on itself in a self-reinforcing and destructive way. Financial market “animal spirits” can be sensitive and fickle—which, I hasten to add, is not the same as saying that financial markets are irrational. And the nature of currency crises is such that they mutate over time, much like a virus. These factors make it extraordinarily difficult to predict crises. The initial triggers in a few countries like Thailand may have been reasonably visible, but the depth, timing, speed and spread of the events that followed were not foreseen.

Keywords

Assure 

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Copyright information

© Springer Science+Business Media New York 1999

Authors and Affiliations

  • Manuel Guitián
    • 1
  1. 1.International Monetary FundUSA

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