Asian Currency Crisis

The Asian Financial Crisis begun with the collapsed of the Thai baht when the Thai government decided to float its currency (baht) against the dollar, pegging its value away from the US dollar after supporting its artificial expansion which was largely real estate driven. This was a period beginning in July of 1997 that caused international fear of recession due to the financial contagion that started in much of Asia. The Asian financial systems were subject to two additional risk fators: maturity mismatches due to excessive liabilities that were predominantly short-term and assets that were much longer term or illiquid, and excessive risk taking. Credit was made available from abroad cheaply and in large quantities because of the implicit government guarantees (Hale, 2011, pg. 2)The