Empirical analysis of the causes behind the east Asia financial crisis

Abstract EN

-This paper statistically examines the key variables that triggered the 1997 East Asian financial crisis.

The researcher constructed a proxy model of a crisis to isolate the causes of a crisis.

The researcher finds that most pressure for a crisis comes from the external sector and the financial sector.

A crisis has a higher probability of occurring when current account deficits are high, foreign interest rates increase, financial liberalization is present, the reserve ratio is low, and a lending boom is underway.

the researcher concludes that the financial sector risk management capability is the most sensitive area of concern in reducing the probability and magnitude of a currency crisis.