The Impact of the Economic Crisis on East Asia
Show Less

The Impact of the Economic Crisis on East Asia

Policy Responses from Four Economies

Edited by Daigee Shaw and Bih Jane Liu

Written by a distinguished group of Asian social scientists, this study summarizes and synthesizes the economic impacts of the crisis on individual countries and their policy response since 2008, and in particular carefully scrutinizes the immediate and remote causes of the crisis. It not only offers an assessment of its impacts, and identifies specific country measures that can be undertaken to stabilize the situation, but also looks at the crisis from three important economic perspectives: that of a healthy fiscal system, international trade, and the energy market.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 1: The Global Financial Crisis: Lessons for Taiwan

Sheng-Cheng Hu


Sheng-Cheng Hu 1.1 INTRODUCTION The US subprime mortgage problem became an apparent crisis in summer 2007 and soon escalated into the worst global financial crisis and economic downturn in 60 years. In the global financial crisis, the five largest investment banks in the US became history and would either disappear or no longer exist in their current forms.1 The government-sponsored agencies such as Fannie Mae and Freddie Mac also had to seek assistance from the US government. The US Federal Reserve System (the Fed) had to come to the rescue of non-banking financial institutions such as Bear Stearns, Merrill Lynch and AIG, while allowing to fail some others (such as Lehman Brothers) that had looked too big to fail.2 The UK experienced its first bank run (Northern Rock) of any macroeconomic significance since 1866 (Miline and Wood, 2008). The three largest banks in Iceland, accounting for about 85 per cent of its banking sector, collapsed within a span of slightly more than a week, and the country avoided bankruptcy only with emergency assistance from the IMF in November 2008. The IMF (2009a) estimated global bank write-downs for 2007–10 to be US$2.81 trillion. According to a study commissioned by the Asian Development Bank (Loser, 2009), capital losses in financial assets worldwide (including stock market valuations, private and public debt, and bank assets) in 2008 amounted to US$50 trillion, while those for developing Asia were US$9.6 trillion, or just over one year’s worth of its gross domestic product...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.