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Article: Financial institutions and the financial crisis in East Asia
Title | Financial institutions and the financial crisis in East Asia |
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Authors | |
Keywords | Asian financial crisis Financial crisis Financial institution |
Issue Date | 1999 |
Publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/eer |
Citation | European Economic Review, 1999, v. 43 n. 4-6, p. 903-914 How to Cite? |
Abstract | This paper investigates institutional reasons for the soft-budget constraint problem; and how the soft-budget constraint problem creates conditions which may result in a financial crisis. As a consequence of soft-budget constraints, bad projects do not stop; bad loans accumulate; and banks and depositors do not receive bad news on time. Poorly informed depositors are then likely to herd to overinvest when there is no bankruptcy ('frenzy'); and they are likely to herd to panic when bankruptcy occurs ('crash'), which may be the result of excessive bad loans that are also a consequence of soft-budget constraints. In contrast, under hard-budget constraints information is disclosed quickly regarding liquidation. Better-informed investors are then less likely to herd wrongly. |
Persistent Identifier | http://hdl.handle.net/10722/138698 |
ISSN | 2023 Impact Factor: 2.8 2023 SCImago Journal Rankings: 2.251 |
ISI Accession Number ID | |
References |
DC Field | Value | Language |
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dc.contributor.author | Huang, H | en_HK |
dc.contributor.author | Xu, C | en_HK |
dc.date.accessioned | 2011-09-08T08:13:03Z | - |
dc.date.available | 2011-09-08T08:13:03Z | - |
dc.date.issued | 1999 | en_HK |
dc.identifier.citation | European Economic Review, 1999, v. 43 n. 4-6, p. 903-914 | en_HK |
dc.identifier.issn | 0014-2921 | en_HK |
dc.identifier.uri | http://hdl.handle.net/10722/138698 | - |
dc.description.abstract | This paper investigates institutional reasons for the soft-budget constraint problem; and how the soft-budget constraint problem creates conditions which may result in a financial crisis. As a consequence of soft-budget constraints, bad projects do not stop; bad loans accumulate; and banks and depositors do not receive bad news on time. Poorly informed depositors are then likely to herd to overinvest when there is no bankruptcy ('frenzy'); and they are likely to herd to panic when bankruptcy occurs ('crash'), which may be the result of excessive bad loans that are also a consequence of soft-budget constraints. In contrast, under hard-budget constraints information is disclosed quickly regarding liquidation. Better-informed investors are then less likely to herd wrongly. | en_HK |
dc.language | eng | en_US |
dc.publisher | Elsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/eer | en_HK |
dc.relation.ispartof | European Economic Review | en_HK |
dc.rights | NOTICE: this is the author’s version of a work that was accepted for publication in European Economic Review. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in PUBLICATION, [VOL 43, ISSUE 4-6, 1999] DOI 10.1016/S0014-2921(98)00103-2 | - |
dc.subject | Asian financial crisis | en_HK |
dc.subject | Financial crisis | en_HK |
dc.subject | Financial institution | en_HK |
dc.title | Financial institutions and the financial crisis in East Asia | en_HK |
dc.type | Article | en_HK |
dc.identifier.email | Xu, C: cgxu@hku.hk | en_HK |
dc.identifier.authority | Xu, C=rp01118 | en_HK |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/S0014-2921(98)00103-2 | en_HK |
dc.identifier.scopus | eid_2-s2.0-0032789425 | en_HK |
dc.relation.references | http://www.scopus.com/mlt/select.url?eid=2-s2.0-0032789425&selection=ref&src=s&origin=recordpage | en_HK |
dc.identifier.volume | 43 | en_HK |
dc.identifier.issue | 4-6 | en_HK |
dc.identifier.spage | 903 | en_HK |
dc.identifier.epage | 914 | en_HK |
dc.identifier.isi | WOS:000080311700017 | - |
dc.publisher.place | Netherlands | en_HK |
dc.identifier.scopusauthorid | Huang, H=7405612120 | en_HK |
dc.identifier.scopusauthorid | Xu, C=23020300700 | en_HK |
dc.identifier.issnl | 0014-2921 | - |