Southeast Asia and the Asian and Global Financial Crises 1997-98 VS 2008-09

1. Southeast Asia and the Asian and Global Financial Crises1997-98 VS 2008-09 ZUZE CAI

2. Outline: • Introduction to the Southeast Financial Crisis in 1997 （Reason ） • Developing trend of 1997 crisis (3 phases) • The impact of the 1997 crisis on the world • Introduction to the Global Financial Crises in 2008 （Reason） • Developing trend of Global Financial Crises • The impact of Global Financial Crises on the world • Analysis of the similarities and differences between 1997 Asian financial crisis and 2008 global financial crisis

3. Introduction to the Southeast Financial Crisis in 1997 （Reason ） July 2, 1997, the Asian financial turmoil swept Thailand, the Thai baht devaluation. Soon, the storm swept through Malaysia, Singapore, Japan and South Korea, China and other places. 2 main reasons: • The economic formation of Asian countries • George Soros and some capitalist group

4. Developing trend of 1997 crisis First phase: In July 2, 1997, Thailand announced a fixed exchange rate system, the implementation of a floating exchange rate system, triggering a financial crisis in Southeast Asia Second phase: At the beginning of 1998, the financial crisis broke out again in Indonesia, facing the most serious economic recession in history, the International Monetary Fund has failed to achieve the desired effect Third phase: At the beginning of August 1998, the international speculators to launch a new round of attack on Hong Kong, the Hong Kong SAR government responded, which suffered defeat.

5. The impact of the 1997 crisis on the world • This crisis has made some Asian countries aware of some deep-seated problems in the process of rapid development, and realized the imperfections of the international monetary system and some other problems. • Provides an opportunity for Asian countries to deepen reform, adjust the industrial structure, improve macroeconomic management. • And in order to strengthen the stability of financial markets, prevent international currency speculators attack each other country, Asian countries signed a currency swap agreement.

6. Introduction to the Global Financial Crises in 2008 （Reason） in August 2008, two of U.S. mortgage giants Fannie Mae and Freddie Mac stocks price plunged, the global financial crisis was triggered by the U.S. financial crisis. 2 main reasons: • The financial crisis is caused by the problem of the housing mortgage loan derivatives • The United States financial order and financial development imbalance, economic fundamentals problems.

7. Developing trend of Global Financial Crises Liquidity crisis: The United States real estate secondary mortgage market crisis. At this time, a large number of panic selling of assets led to the rapid solidification of financial market liquidity, so far, the payment crisis has finally evolved into a liquidity crisis. (February 2007 to May 2008) Credit default crisis: Financial derivatives based on these bonds and credit default swaps will result in huge losses of up to $1 trillion (2008 to 2009) Interest rate market crisis: The United States bank market and currency market will once again appear liquidity crisis, mortgage loans of financial institutions in the United States two largest indirect government guarantee is Fannie Mae and Freddie Mac, the issuance of credit rating to Treasury bonds may yield rate increased significantly in the dangerous situation. This crisis will shake the confidence of U.S. Treasury bonds, triggering a larger global financial market shocks. Dollar crisis: The crisis has shaken the US dollar's position in the global currency market

8. The impact of Global Financial Crises on the world • The United States and the global suffer recession in the real economy • Global imports and exports was restrain by the crisis • Unemployment increased

9. Analysis of the similarities and differences between 1997 Asian financial crisis and 2008 global financial crisis Similar point: • Both two crisis are sub loan crisis • Both two crisis has led to the decline of all the countries involved • Both two crisis is caused by money(currency) Differences: • Different types of financial crisis: in 1997, the key words of the Asian financial crisis is the exchange rate, foreign exchange reserves, international hot money; the key words of the global financial crisis in 2008 is the Fed raised interest rates, asset securitization, credit overdraft. • Different influence area: The 1997 Asian financial crisis mostly affected countries in Asia; and he financial crisis of 2008 affected the economy of the whole world

10. Thank you! The impact of the economic crisis on the country and the world makes people unhappy, but we can find out what we should improve during the crisis, taking these two crises we mention above for example, we can see the country deficiencies of control of financial markets. Hence, the micro-macro institutional coordination often becomes important to not only provide a soft landing for the economies, but also to insulate development plans.