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Costas Simitis

Greece had requested something more, or whether the Greek government had brought any fresh proposals of its own. Unfortunately, this had not been the case. In a press conference he gave on the eve of the Council meeting, the Greek Prime Minister said: We have not asked for financial support. We are working according to the ­stability plan which the Commission approved.… We need the psychological Greece.indb 37 3/13/2014 1:56:36 PM 38 Part I: How we arrived at the first Memorandum and political support of Europe. We want it to say: Yes, Greece is credible, we

in The European debt crisis
Open Access (free)
Crisis, reform and recovery
Shalendra D. Sharma

low inflation also led to a gradual decline in nominal interest rates.5 Third, the real exchange rate was not significantly overvalued. In fact, in the three years prior to the crisis, the real exchange rate was essentially flat. Fourth, the gross domestic savings remained high, exceeding 30 per cent in 1995–96. Fifth, the fiscal deficit, which was about 2.5 per cent of GDP in the early 1980s, was turned into a surplus in 1993 – a position it maintained on the eve of the crisis. Sixth, the government budget was close to being in balance, and between 1990 and 1995, Korea

in The Asian financial crisis
Oonagh McDonald

conducive to the old jobbing system.12 In fact, on the eve of Big Bang in 1986, there were only five jobbing firms left in existence. The Restrictive Trades Practices (Stock Exchange) Bill was debated in Parliament in December 1983 and became law in March 1984. Although the Stock Exchange rule book was registered in 1977 and referred to the Restrictive Practices Court in 1979, almost five years had passed without the case being heard. It was due to be heard by Mr Justice Lincoln early in 1984, but the legislation prevented that. Its purpose was to exempt the Stock

in Holding bankers to account
Why China survived the financial crisis
Shalendra D. Sharma

assessed properly. Cognizant of the fact that the ratio of non-performing loans in South Korea was 17 per cent on the eve of the crisis, Governor Dai and other reform-minded officials of the PBC were quick to point out that only 5 to 6 per cent of the loans are unrecoverable. However, keeping in mind that the so-called problem loans in China are not clearly recognized on banks’ balance-sheets (thereby making the scale of uncovered losses a major source of uncertainty), most analysts (including those in the IMF), are of the view that some 50 per cent of the borrowers are

in The Asian financial crisis
Open Access (free)
The evolving international financial architecture
Shalendra D. Sharma

vulnerable. Yet, on the eve of the crisis, the Malaysian economy enjoyed stronger fundamentals than her neighbors – partly because of the early set of regulations and restrictions on capital flows that it had instituted in 1989 and 1994. The GDP growth of Malaysia averaged 8.9 per cent in the period 1990–95 and 8.6 per cent and 7.7 per cent respectively in 1996 and 1997. In fact, in the first quarter of 1997, Malaysia enjoyed a robust 8 per cent growth-rate – one of the highest in the region (Bank Negara Malaysia 1998; 1999). Also, as Athukorala (1998, 85) notes, “the

in The Asian financial crisis
Open Access (free)
Crisis, reform and recovery
Shalendra D. Sharma

in mid-1997. As was noted earlier, the government essentially proscribed domestic financing for the budget throughout – a strategy that kept both expenditures and monetary growth under relative control. Moreover, the government also adopted a stringent monetary program to bring down inflationary pressures. By 1969, inflation had been reduced to less than 20 per cent and external accounts were brought into balance (Bhattacharya and Pangestu 1997, 394). Since the mid-1980s, inflation has been kept within single digits, and on the eve of the crisis was about 126

in The Asian financial crisis
Open Access (free)
Crisis, reform and recovery
Shalendra D. Sharma

–3). Even more remarkable was the stability of this growth. Between 1988 and 1996, the growth rate of real exports was 14.5 per cent, inflation averaged a low 5.3 per cent and gross domestic savings as a percentage of GNP rose from 17 per cent in the early 1980s to over 30 per cent in the late 1980s. The growth in GNP per capita rose to about 8 per cent per annum in the first half of the 1990s. On the eve of the crisis in 1997, Thai GNP per capita had reached US$2,740 compared to the GNP per capita of US$220 in 1972 and US$870 in 1987 (Jomo 1997, 56–7). The rapid economic

in The Asian financial crisis
Open Access (free)
Issues, debates and an overview of the crisis
Shalendra D. Sharma

23, 1997, stock prices in Hong Kong fell by 10.4 per cent, a larger fall than what occurred following the Tiananmen incident. However, nothing better illustrated the crisis in Hong Kong than the spectacular collapse of Peregrine Investment Holding. This regional investment house, known for its risk-taking, fell because of its unsound investment in the ironically named Indonesian taxi company, Steady Safe. On the eve of its collapse, Peregrine held $270 million in 56 Introduction: issues, debates and overview 9 10 11 12 13 14 15 16 17 18 promissory notes

in The Asian financial crisis