What is 1997 Asian financial crisis?
[[File:Asian Financial Crisis EN vector.svg|thumb|350px|The countries most affected by the 1997 Asian financial crisis.]] The '''Asian financial crisis''' was a period of [[financial crisis]]. It gripped much of Asia beginning in July 1997. ==Causes== Currency pegs and fixed exchange rates: Many Asian countries, including Thailand, South Korea, and Indonesia, had fixed exchange rate regimes or money pegs to the U.S. dollar. This made their currencies vulnerable to speculative attack.<ref>{{Cite journal|last1=Christiano|first1=Lawrence|last2=Gust|first2=Christopher|date=April 2000|title=The Expectations Trap Hypothesis|url=http://dx.doi.org/10.26509/frbc-wp-200004|journal=Working Paper (Federal Reserve Bank of Cleveland)|doi=10.26509/frbc-wp-200004|issn=2573-7953}}</ref> Rapid capital inflows and excessive borrowing: Asian economies experienced a surge in capital inflows and relied heavily on foreign borrowing, leading to over-investment and unsustainable levels of debt <ref>{{Cite web|title=What happened to Asia?|url=http://web.mit.edu/krugman/www/DISINTER.html|access-date=2023-05-30|website=web.mit.edu}}</ref> Weak financial systems and corporate governance: short financial regulations, weak banking sectors, and poor corporate governance practices exacerbated the vulnerabilities in the affected economies ==Consequences== Money reduction: Many Asian currencies experienced significant devaluations, leading to a sharp decline in the value of assets and increased debt burdens for companies with foreign currency liabilities Financial sector failures: Banks and financial institutions faced insolvency and encountered difficulties in meeting their duty, contributing to a severe banking crisis in the region <ref>{{Cite web|title=Finance and Development|url=https://www.imf.org/external/pubs/ft/fandd/1998/06/imfstaff.htm|access-date=2023-05-30|website=Finance and Development {{!}} F&D|language=en-US}}</ref> Economic contraction and social impact: The crisis resulted in severe economic contractions, rising unem