Question

Please compare the differences of Asia financial crisis in 1997 and Global financial crisis in 2008.

Answer 1

BASIS	GLOBAL FINANCIAL CRISIS (GFC)	ASIAN FINANCIAL CRISIS (AFC)
REPONSES OF CENTRAL BANKS	In the subprime crisis, major central banks have intervened aggressively to provide liquidity to contain disruptions and contagion in financial markets. At the same time, the U.S. Federal Reserve has cut interest rates substantially to ease monetary conditions, and the U.S. Congress has approved a fiscal stimulus package.	In the Asian crisis, monetary and fiscal policies were initially tightened to support exchange rates because of massive capital outflows and a run on foreign reserves, which contributed to a downward spiral in the real economy. Only after exchange rates had stabilized at a lower level did governments adopt more expansionary fiscal policies to support the real economies.
RESCUE	In the global crisis, the main recapitalization of banks has come through direct placements or through capital injections by sovereign wealth funds. Two notable exceptions were Northern Rock…..and the Bear Stearns rescue	During the Asian crisis, many governments took over nonperforming loans and injected new capital into the banks, while the IMF topped up the depleted foreign reserves of the central banks. Only at a later stage were there substantial injections of private capital in the form of foreign buyouts of local banks.
HARD HIT PARTIES	The subprime equivalents are the U.S. household sector, the banks that had engaged in off-balance-sheet investments, the investment banks and the hedge funds and other investment companies	In the Asian crisis, those borrowers were the corporate entities and banks that were both overleveraged and overreliant on foreign debt.