KHỦNG HOẢNG CHÂU Á 1997 VÀ KHỦNG HOẢNG THẾ GIỚI 2008

Đây là bài luận giữa kì nói về cuộc khủng hoảng châu Á 1997 và khủng hoảng Thế giới 2008. Bài làm toàn bộ đều được thực hiện bằng tiếng Anh. INTRODUCTION The world is slowly turning the pages of a new book, but the suffering, damage from the crisis aftershocks are still remaining on every street where people live.Stepping up the damage caused by the crisis, the world economy is ever growing but it still not escape the cycle of crisis rule . Sterling Crisis of 1992, the 1994 Mexican peso crisis, the Asian monetary crisis in 1997, 1998 Russia financial crisis, 19992002 Argentina crisis, the global financial crisis 2008 ... are typical crisis. But which have the widest impact and cause the most damage are probably the Asian monetary crisis in 1997 and the global financial crisis of 2008. So what is the cause of the crisis? Their movements like? What is the consequence? And what experience has Vietnam learned through two crises? It is also content of this essay. Lack of experience, English proficiency is not fluent those probably create some gaps in my essay. I hope that my imperfections will be filled with your comments, evaluation… so that I can complete graduating essay better than in the near future..... Sincerely thank

Trang 1/19 I ASIAN MONETARY CRISIS 1997 II REASON The direct reason pushed Asian to crisis in the gulf due to the rapidly increase of the loan which had no ability to pay. In early 1990s,East Asian countries started loosening regulations for financial markets,so a highly rising wave of loan, in which lending credit to the nonfinancial business sector increase rapidly. Simultaneously , due to weak oversight of the legal executive agency, some bank lacked experts in tracking and monitoring the behavior of borrowers, losses due to bad debts started to rise. All of them impacted negatively on the real of bank capital of banks. Depleted resources, banks no longer afforded to borrow which made the operation of the economy narrow because of insufficient working capital. On the other hand, when the government implemented this policy, interest rate in the Asian countries was higher than developed countries. Because of this, the international capital flows poured massively to seek the higher profitability. Unfortunately, when the real estate market of Thailand collapsed, some financial institutions went bankrupt, people no longer believe in the ability of controlling exchange rate of the government, a chain of foreign investors withdrawed capital at the same time. All three factors simultaneously impacted on the financial system, destroyed liquidity of the banking series. Tiểu luận Tài chính quốc tế Trang 2/19 I DEVELOPMENT III Thailand It was the origin of the crisis. From 1985 to 1996, Thailand's economy had a high growth over 9% per year, the highest economic growth rate of any country at the time. On 14 May and 15 May 1997, Thai baht was hit by massive speculative attack. On 30 June 1997, Prime Minister Chavalit Yongchaiyudh said that he would not devalue the baht. Thailand's booming economy occurred in finance, real estate, and construction that resulted in huge numbers of workers returning to their villages in the countryside and 600,000 foreign workers being sent back to their home countries. The baht reached its lowest point of 56 units to the US dollar in January 1998. The Thai stock market dropped 75%. Finance One the largest Thai finance company until then was collapsed. On 11 August 1997, the IMF unveiled a rescue package for Thailand with more than $17 billion, enclosed to conditions such as passing laws relating to bankruptcy (reorganizing and restructuring) procedures and establishing strong regulation frameworks for banks and other financial institutions. The IMF approved on 20 August 1997, another bailout package of $3.9 billion. IV Philippines On 03/07/1997, a day after the crisis began in Thailand, the Philippines central bank forced to intervene in the market to protect the peso, increasing the overnight interest rate from 15% to 24%. Value of the peso plummeted from 26 pesos to 38 pesos per a dollar in 2000, and up 40 pesos at the end of the crisis. V Hong Kong Tiểu luận Tài chính quốc tế Trang 3/19 The crisis occured 24 hours after the United Kingdom Hong Kong returned to China. In 10/ 1997, the exchange rate of Hong Kong dollar was fixed against the U.S. dollar was 7.8 but Hong Kong 's inflation rate- much higher than inflation in the U.S. and this situation lasted many years . Because of this, the Monetary Authority of Hong Kong had spent more than a billion dollars to defend the local currency. Despite of trying to keep a normal currency exchange rate, Hong Kong stock market is extremely unstable, the Hang Seng index dropped 23 % in just three days from 20 to 23/10/1997 and overnight interest rate had raised rapidly.The government ended the war by spending approximately 120 billion Hong Kong dollars ( about 15 billion U.S. dollars ) to buy shares of many companies , became a major shareholder in a number of companies , such Government at HSBC in a 10% stake . VI Korea Korea ranked 11th among the largest economies in the world . When a crisis occurred, the poor condition of the existing banking system stemming from the inefficiently huge debt so Moody " s downgraded the credit of South Korea from A1 to A3 in January 11/1997 and continued down to B2 on December . This event contributed to the Korean stock market plunged over, down 4 % on 07/11/1997 , reduced to 7 % on 8/11 and 7.2 %.So on the news 11/24/2997 IMF requested Korean to reform the financial system . In 1998, Hyundai acquired Kia Motors Motor. $ 5 billion-Venture Capital Fund of Samsung was dissolved because of the strong impact of the crisis, following this was the big event -Daewoo Motors had sold to General Motors. Tiểu luận Tài chính quốc tế Trang 4/19 South Korea's won declined from 1000 to 1700 won a dollar change. In spite of many efforts to improve the GDP per capita , after the crisis , Korea's national debt tripled compared to the previous . Before that situatio, the IMF support package for South Korea was announced in Seoul on December 3, 1997 and was formally approved by the IMF on the following day. It eventually consisted of $57 billion. VII Malaysia Before the crisis, the transactional account deficit was about 5%. Malaysia is a country received much the foreign investment, this was reflected in the KLSE (official stock exchanges of Malaysia) is considered the most active trading floor in the world (even total value of transactions surpassed the NYSE). At that time, everyone expected the country to maintain growth and become a developed country by 2020. Before the crisis, KLSE Index stands at 1.200, the ringgit was trading at 2.5:1 ratio against the dollar, the overnight rate less than 7. Overnight rates rose from under 8% to 40%, which made the credit rating was down and occurred wave of selling securities and currency massively. At the end of 1997 , KLSE lost 50% points, dropped below 600, the ringgit also lost 50% of its value .In 1998, GDP fall 6.2%, the ringgit dropped 54.7% value and KLSE slipped to under 270 points. VIII Indonesia On August, Rupiah was attacked by speculators and 14th, the regime of floating exchange rates had been replaced by managed floating regime completely. Rupiah was devalued continuously. IMF had arranged a financing package of emergency aid to Indonesia up to 23 billion Dollar, but Rupiah was devalued continuously by massive sales and demand in U.S. Dollar soared. On September, Rupiah prices and the stock market index decreased to levels below historic norms. In this situation, Tiểu luận Tài chính quốc tế Trang 5/19 many companies promoted to buy Dollar (mean Rupiah sold out) making more currency devalued and inflation rate soared. Inflation accelerated with tightening fiscal policies as required by IMF that made the government did not subsidize food and gasoline, so prices of two items increased. The scrambling to purchase broke out. Particularly in Jakarta there were 500 people killed by violence. The economic crisis and social crisis had led to a political crisis. Between 1998, Suharto was forced to resign presidents. Before the crisis, the exchange rate between the Dollar and Rupiah was about 2000:1. But in periods of crisis, the exchange rate had dropped to 18.000. IX American and Japan The economy of the two major powers were not collapsed, but also heavily affected. On 11/27/1997, DJ Industrial Index fell 554 points, or 7.2%, the NYSE temporarily stopped trading in a short time. Japan economic relate closely and tightly with the Southeast Asian countries. From late 1990s, after the economy "bubble" fell, domestic demand was not high, the recovery of the Japanese economy is mainly based on exports. Southeast Asia is one of the major export markets of Japan, so the currency devaluation and economic stagnation situation in Southeast Asia has significantly affected Japan's exports to the region. At the crisis, USD/JPY dollar fell to 147 ,GDP growth in Japan decreased from 5% to 1.6%. The Asian crisis also made a number of business bankruptcies in Japan. X CONSEQUENCES XI Asia The crisis had significant macroeconomic-level effects, including sharp reductions in values of currencies, stock markets, and other asset prices of several Asian Tiểu luận Tài chính quốc tế Trang 6/19 countries. The nominal U.S. dollar GDP of ASEAN fell by US$9.2 billion in 1997 and $218.2 billion (31.7%) in 1998. In South Korea, the $170.9 billion fell in 1998 which was equal to 33.1% of the 1997 GDP. Many businesses collapsed, and as a consequence, millions of people lived below the poverty line in 1997–1998. Indonesia, South Korea and Thailand were 2 countries most affected by the crisis. The economic crisis also led to a political upheaval, most notably culminating in the resignations of President Suharto in Indonesia and Prime Minister Chavalit Yongchaiyudh in Thailand. Heavy U.S. investment in Thailand ended, replaced by mostly European investment. More long-term consequences included reversal of the relative gains made in the boom years just preceding the crisis. Nominal US dollar GDP per capital fell 42.3% in Indonesia in 1997, 21.2% in Thailand, 19% in Malaysia, 18.5% in South Korea and 12.5% in the Philippines. The CIA World Factbook reported that the per capita income (measured by purchasing power parity) in Thailand declined from $8,800 to $8.300 between 1997 and 2005; in Indonesia it increased from $2.628 to $3.185; in Malaysia it declined from $11.100 to $10.400. XII Outside Asia After the Asian crisis, international investors were reluctant to lend to developing countries, leading to economic slowdowns in developing countries in many parts of the world. The powerful negative shock also made sharply reduced the price of oil, which reached a low of about $11 per barrel towards the end of 1998, causing some financial matter in OPEC nations and other oil exporters. In response to a severe fall in oil prices, some mergers and acquisitions were implemented between 1998 and 2002. Tiểu luận Tài chính quốc tế Trang 7/19 The reduction in oil revenue also contributed to the 1998 Russian financial crisis, which in turn caused Long-Term Capital Management in the United States to collapse after losing $4.6 billion in 4 months. A wider collapse in the financial markets was avoided when Alan Greenspan and the Federal Reserve Bank of New York organized a $3.625 billion bailout. Major emerging economies Brazil and Argentina also fell into crisis in the late 1990s. XIII Vietnam After renovation, the Soviet Union and Eastern Europe-the main trade partner of Vietnam disintegrated. After this time, Vietnam began to search new export markets, such as Southeast Asian countries such as Singapore, Japan, Korea, Taiwan. The growth is not longly maintained the Asian crisis occurred. The growth began to decline in 1994 and fell sharply in Vietnam 1997.1998 by mainly relying on the market to exports. Besides, FDI investment in Vietnam decreased considerably, numerous investors simultaneously withdrawn, the amount of investment for the project fell 16% in 1996, 45.3% in 1997, 1 6.1% in 1998. But the impact was not significant compared to the loss of Indonesia, South Korea and Thailand. XIV LESSON FOR VIETNAM Essence of the Asian currency crisis was a crisis of foreign debt. During the crisis, the demand for dollars was too high while the supply was limited. Local currency depreciated rapidly which leading to loss of the ability to pay it. That is the first lesson for Vietnam -how to manage exchange rate to change least. In strategic economic development as well as macroeconomic management,it is necessary to maintain a relative balance between these goals: inflation, growth, interest rates, balance of payments Macroeconomic policies need to be running a flexible, synchronous, tightly coordinated and complement each other. Tiểu luận Tài chính quốc tế Trang 8/19 Continuing to open the economy but not completely loose. Vietnam needs to maintain a reasonable ratio: between domestic capital and foreign loans, between short-term capital, medium and long-termcapital; between borrowing term and invested subjects. XVTHE WORLD FINANCIAL CRISIS IN 2008 XVI REASON The current economic crisis is considered the greatest economic crisis, the most severe in the world for more than 60 years since the Great Depression 1929-1933 World. The cause of the crisis were identified as starting from the financial crisis in the U.S. There were many reasons leading the world financial crisis 2008,they could be listed as: XVII Imprudent mortgage lending Against a backdrop of abundant credit, low interest rates, and rising house prices, in 2006-2007 lending standards were relaxed to the point that many people were able to buy houses they couldn’t afford.( Just from 5/2001 to 12/2002, the Fed had cut loan interest rates 11 times from 6.5% to 1.75% / year.)Low interest rates led many homebuyers rushed that blew up "bubble" real estate. House prices rise made banks feel safe to give money to people who did not have the ability to repay the loan. And the bank also think that, if the borrower did not repay, they would seized value which has been pushed higher. When prices began to fall and loans started going bad, there was a severe shock to the financial system. XVIII Securitization So what is securitization? Tiểu luận Tài chính quốc tế Trang 9/19 Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations and selling said consolidated debt as bonds, pass-through securities, or collateralized mortgage obligation (CMOs), to various investors. The principal and interest on the debt, underlying the security, was paid back to the various investors regularly. Securities backed by mortgage receivables are called mortgage-backed securities (MBS), while those backed by other types of receivables are asset-backed securities (ABS). The reason for these banks can give people mortgages "subprime" risky with a large scale by the financial companies and investment banks, in particular the two companies Fanie Mae and Freddie Mac was sponsored by the U.S. government, "financed" by buying loans from banks, turned them into vouchers are secured by mortgage loans for resale to companies, banks other large investors, such as Stearms Bear, Merrill Lynch This finance company, investment bank issued that bonds again on the basis of evidence from mortgage lenders to sell it for U.S. banks and other banks in many countries around the world .The "securitization" of mortgage loans were beyond the control of the state. Chain speculative business activities of the housing market had heated up, housing prices were pushed up high, becoming "bubble". In summary, Banks had not prudent for subprime loans. Ownership of mortgage- backed securities were widely dispersed, causing repercussions throughout the global system when subprime loans went bad in 2007. XIX Global imbalances Global financial flows have been characterized in recent years by an unsustainable pattern: some countries (China, Japan, and Germany) run large surpluses every year, while others (like the U.S and UK) run deficits. The U.S. external deficits Tiểu luận Tài chính quốc tế Trang 10/19 have been mirrored so U.S. borrowing cannot continue indefinitely; the resulting stress underlies current financial disruptions. XXLack of Safty,Transparency and Accountability in Mortgage Finance “Throughout the housing finance value chain, many participants contributed to the creation of bad mortgages and the selling of bad securities, apparently feeling secure that they would not be held accountable for their actions. A lender could sell exotic mortgages to home-owners, apparently without fear of repercussions if those mortgages failed. Similarly, a trader could sell toxic securities to investors, apparently without fear of personal responsibility if those contracts failed. And so it was for brokers, realtors, individuals in rating agencies, and other market participants, each maximizing his or her own gain and passing problems on down the line until the system itself collapsed. Because of the lack of participant accountability, the originate-to-distribute model of mortgage finance, with its once great promise of managing risk, became itself a massive generator of risk.” -Statement of the Honorable John W. Snow before the House Committee on Oversight and Government Reform, October 23, 2008. Those reasons mentioned were direct reasons why 2008 economic crisis occurred, but more deeply, the financial crisis caused by the structure and operation mechanism the U.S. economy. After the world economic crisis of 1929-1933, the economic theory to enhance the role of market self-regulation, Keynesian economic theory to enhance the role of state regulators in market economies were born. Coordination mechanisms between market regulation and state regulation which helped world market economy grew relatively stable for more than 60 years(corrective, reduce the scale, devastaing of the economic crisis). But in the 80s of the previous century, the school of neo-liberal economics (neoclassical) was featured. In the context of implementing policies of economic liberalization, the government also implemented loose monetary policy in a long time. To recover the Tiểu luận Tài chính quốc tế [...]... to reduce the inter-bank interest rates on 12/2007 and 2 /2008, but it’s not effective as expected On 11/1 /2008 Bank of America (the largest bank in USA about deposits and market capitalization) had spent $ 4 billion to buy Countrywide Financial after it went bankrupt because of bad loans 17/02 /2008, British nationalized Northern Rock bank 28/2 /2008, DZ Bank of Germany were included in the list of victims... http://doc.edu.vn/tai-lieu/de-tai-cuoc-khung-hoang-kinh-te-toan-cau -20082 010-22747/ http://www.thanhnien.com.vn/news1/pages /20084 2 /20081 018163521.aspx http://timtailieu.vn/tai-lieu/tieu-luan-cuoc-khung-hoang-tai-chinh-my-va-tacdong-den-kinh-te-the-gioi-4195/ http://luatminhkhue.vn/pha-san/mot-so-phan-tich-ve-nguyen-nhan-va-hau-qua-cuacuoc-khung-hoang-kinh-te-the-gioi-hien-nay.aspx http://tuanvietnam.vietnamnet.vn /2008- 09-24-khung-hoang-tai-chinh-my-ditim-nguyen-nhan-va-he-qua-... debt 15/9 /2008, this was the worst day on Wall Street since the market reopened after the terrorist 11/9/2001 20-21/9 /2008, announcing the details of the rescue plan of 700 billion dollars Two banks Goldman Sachs and Morgan Stanley were converted into multifunctional banking group that marking the end of the investment banking model on Wall Street Tiểu luận Tài chính quốc tế Trang 13/19 25/9 /2008, Washington... victims of the subprime lending crisis, with total depreciated assets worth up to 1.36 billion euro From 16 to 17/3 /2008, Bear Stearns was sold JP Morgan for $ 10 dollars per share 7/9 /2008, Fed and U.S Finance Ministry took Fannie Mae and Freddie Mac to support U.S real estate market On August 2008, Lehman Brothers, the largest and oldest financial institution in the United States, went bankrupt Merrill... economy was declined.In 2008, this ratio was 23.79%, its lowest level in 20 years back Declining dollar value, up to September 2009, the dollar had lost 10% compared to 12/2005 and 18% compared with December 2000 (based on the USD / SDR) Exchange rate calculated on SDR September 2009 Source:IMF(Exchange rate calculated on SDR September 2009) Currently, the budget deficit in 2008 was estimated at 482... first recession since its founding… so on The world not only faced financial difficulties but also faced food speculation and the suddenly rise of crude oil prices In late 2007 early 2008, the global food crisis occurred In 2008, food prices around the world rose 80% of which food prices rose by 230%, food prices rose 12.8% Had at least 37 countries around the world faced food crisis By the day of April,... http://timtailieu.vn/tai-lieu/de-tai-dien-bien-va-nguyen-nhan-khung-hoang-taichinh -1997- 1998-20634/ http://www.dav.edu.vn/en/introduction/organization-structure.html?id=398:so-22nhat-ban-voi-cuoc-khung-hoang-tien-te-o-dong-nam-a http://fli.com.vn/blogs/viewpost/67256/archive/11/2011.html http://www.tapchicongsan.org.vn/Home/The-gioi-van-de-sukien /2008/ 243/Nguyen-nhan-sau-xa-dan-toi-cuoc-khung-hoang-tai-chinh-cua.aspx... Motors, Ford Motor and Chrysler LLC also were at risk of bankruptcy December 12, 2008, GM had announced the temporary closure of its 20 plants in North America Reducing consumption, excess unsold goods led to the general price level of the economy steadily declined, pushing the U.S economy to a risk of deflation On 15/9 /2008, 4th large investment bank Lehman Brothers filled for bankruptcy protection,... dramatically from 550 USD / ton to 760 USD / ton and up to $ 1,000 / ton pushing millions of people in the America, Africa -"the granary of the world" went into hunger In contrast, world crude oil prices in late 2008 went down deeply and on 3/12 dropped below 45 USD / barrel - the lowest level since February 5th No one could guess that just a few months earlier, culminating in July, the price of a barrel of crude... was from developed countries with figures up to 10,200 billion Whereas developing countries spent only U.S $ 1.700 trillion Global GDP was 5,826 billion USD in 2009 that decreased if we compared with 2008. That pulling the average speed of the entire development stage went down, from 4.04% for the period 20012007, to 3.2% for the period 2001-2010 Tiểu luận Tài chính quốc tế Trang 15/19 For Asia, the . regulation frameworks for banks and other financial institutions. The IMF approved on 20 August 1997, another bailout package of $3.9 billion. IV Philippines On 03/07/1997, a day after the crisis began in Thailand,. avoided when Alan Greenspan and the Federal Reserve Bank of New York organized a $3.625 billion bailout. Major emerging economies Brazil and Argentina also fell into crisis in the late 1990s. XIII. Europe influenced by the subprime loan on the market. And German bank’s SachsenLB had also received bailout from the government. 8/2007 a number of U.S. credit institutions such as New Century Financial Corporation