Beginning in mid-1997, five East Asian countries lapsed into severe financial crisis: Indonesia, Malaysia, the Philippines, South Korea and Thailand. The crises centered both on the value of these countries’ currencies and on the solvency of their banking systems (Barth etaL, 1998; Garcia, 1998; Schwartz, 1998).
Figure One tracks the relative value in U.S. dollars of each country’s currency from April 1, 1997 to April 30, 1999. In all five crisis countries, the period of sharp decline ended by February, 1998. The period of free fall was longest and deepest in Indonesia, which was the only country to experience a political crisis as well. In all countries, currency values have strengthened since early 1998. As with the fall, the recovery has been rockiest in Indonesia, where political uncertainties remain strong. As Mei (1999) documents, political instability makes financial stability hard to maintain. We may come to a conclusion the banking service was destroyed as it is. it was rather hard to carry out the economical operations besides citizens suffer. but if they have such a service in the Internet it may help them to take speedy loans now to solve their problems.
Malaysia stabilized its currency by imposing controls on capital movements. The other four countries negotiated a series of assistance agreements with international lending institutions and particular foreign countries. The sources and size of outside assistance are summarized in Table 1. For a country undergoing crisis, the availability of outside aid is largely conditioned on its promise to maintain convertibility, to reform domestic financial regulation, and to strengthen its insolvent banks.