Financial policies in emerging markets - Mario I Bljer

The 1994-1995 Mexican crisis was the first in a succession of financial
crises to hit emerging markets in Thailand, Indonesia, Malaysia, South Korea,
Russia, Brazil, Argentina, and Turkey. In almost all these cases, problems in the
banking sector played a key role. Any analysis of recent developments in emerging
market economies must consider two questions: What is the degree of financial
vulnerability in emerging market economies, and what, if any, is the connection
between the exchange rate regime and financial vulnerability?This book furthers
understanding of the impact of financial policies on emerging market economies.
Following an introduction by the editors, the book contains two main sections. The
first presents theoretical and empirical evidence on the relation between financial
policy and financial vulnerability. The second considers financial policy in central
and eastern Europe in terms of the euro and the European Monetary Union. Although
there is no clear-cut answer to which exchange rate regime works best, the book
concludes that the financial vulnerability of emerging market economies suggests the
advisability of greater caution in financial system liberalization and
management.