Bank Lending and Contagion: Evidence from the Asian Crisis

By Carmen M. Reinhart, Graciela L. Kaminsky. 2001

116 citations recorded by the source corpus.

This paper analyzes how the crisis in Asia spread during the second half of 1997. We cast our net wide and investigate several possible trade and financial linkages among the Asian economies. We construct a series of “contagion vulnerability indices,” which capture the various manifestations of exposure through trade and finance to the initial crisis country and contrast the predictions of this index to actual outcomes during the Asian crisis. We pay attention to the reversal in bank lending of Japanese and European banks, which were lending heavily to emerging Asia on the eve of the crisis. Daily interest rate and exchange rate data for Indonesia, Malaysia, the Philippines, South Korea, and Thailand are used to assess whether the patterns of causality and interdependence changed as the crisis spread, as well as to answer question of whether interdependence among the Asian economies has changed as the result of the crisis.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/0b7f66c722a890556ec91633ad1d8f7fcf7664f8

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Finance

Citations in the corpus

Global Waves of Debt: Causes and Consequences (2021, background): “…from the Asian crisis has been examined by Baig and Goldfajn (1999); Chiodo and Owyang (2002); Claessens and Forbes (2013); Glick and Rose (1999); Kaminsky and Reinhart (2000, 2001); Kawai, Newfarmer, and Schmukler (2005); Moreno, Pasadilla, and Remolona (1998); and Sachs, Cooper, and Bosworth…”
Effects of Financial Globalization on Developing Countries: Some Empirical Evidence (2003, background): “This bank transmission channel, documented in Van Rijckeghem and Weder (2000) and Kaminsky and Reinhart (2001), can be particularly potent since a large fraction of bank lending to emerging markets is in the form of short-maturity loans.”