1. 1997 : Thailand hit by massive speculative attacks. Prime Minister Chavalit Yongchiayudh announced that he will no longer continue to defend the Thai Baht , which was pegged to US dollar. Thailand's booming economy @ 9 % per annum came to a halt amid massive layoffs Thai stock market dropped 75%. Finance one , the largest THai finance company collapsed.
2. Singapore dipped into a short recession. But it was relatively short duration due to active management by the government. wiki. for more details
3. Immediate Trigger of AFC : Currency Devaluation
   1. Fixed Exchange Rate -> stabilize value of currency to encourage trade
      1. Encouraged Excessive Exposure to risk
         1. Encouraged External Borrowing
   2. exchange market flooded with currencies of crisis countries , putting depreciative pressure on their exchange rates
   3. government had to intervene in exchange market : buying any excess domestic currency with foreign reserves
      1. decision to float currencies : foreign currency-denominated liabilities grew causing more bankruptcies and further deepening of crisis
   4. Frederic Mischkin : herd mentality among investors that magnified a relatively small risk in the real economy
4. Weak Banking Sector amidst Financial Liberalization
   1. Regulation of Capital Inflow : role of financial markets/ liberalization
      1. Economies of SEA maintained high interest rates attractive to foreign investors looking or high rates of return. As a result , the region's economies received large inflow of money
         1. short-term capital flow that was highly conditioned for quick profit
      2. Monetary Policies
         1. buffer against panic selling : withdrawal of credit : credit crunch
         2. ie. capital fleeing from country
   2. Crony Capitalism
      1. money went to certain people , not particularly the best suited or most efficient, but those closest to the centers of power
5. role of the real economy : Bubble awaiting to Burst
   1. As a result of the large inflow of money , economies experenced a dramatic runup in asset prices.
      1. 1994 , Economist Paul Krugman attacked the "Asian economic miracle". He argued that it' economic growth had been solely the result of capital investment. However , growth in total factor productivity had only increased marginally and that only the latter could guarantee long term prosperity.
         1. large quantities of credit became available generated by a highly leveraged economic climate , pushing asset prices to an unsustainable level
            1. asset prices began to collapse causing individuals an companies to default on debt obligations
   2. Current Account Deficits
   3. Susceptible to emerging competitors
      1. growing exports of China , leading to export growth slowdown
         1. US Federal Reserve Bak under Alan Greenspan raised U.S. interest rated making US a more attractive investment destination
         2. made SEA exports less competitive