The Global Financial Crisis and Asia-Pacific Anwar Nasution The origin of the crisis
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(i) falling foreign demand for this region’s exports; and (ii) falling commodity prices;
(i) sufficiently robust domestic demand; nor
(ii) large intra-regional trade
to offset the impact of falling exports to their main markets in the U.S. and Europe.
Emerging economies are suffering from a double blow as their growth is also driven by foreign capital inflows;
(i) falling external demand for the production of their corporate customers and falling commodity prices;
(ii) increasing external debt burden due to the depreciation of their domestic currencies. This problem is particularly facing by those banks with large foreign debt to finance domestic credit.
This region has adopted four policy responses to overcome the global crisis:
Like in other countries, the authorities in this region address the liquidity and solvency problems of their financial systems by: