The international financial crisis: timeline, impact and policy responses in Asia and the Pacific

Abstract

This paper examines how the international financial crisis impacted Asia and the Pacific and discusses the implications of the crisis for central banks in the region. The paper consists of two parts. Part I presents a simplified timeline of the spillovers of the international financial crisis to the region, as well as some key factors that help explain cross-country differences in the impact of the crisis on Asia and the Pacific. Part II examines the effects of the crisis in more detail, exploring some of the policy challenges it poses through three lenses that correspond to the research priorities of the BIS Asian Research Programme (ARP): monetary policy and exchange rates, development of financial markets, and financial stability. The paper highlights the role of the research output from the ARP in illuminating these challenges for central banks. The focus throughout the paper is on twelve regional economies: Australia, China, Hong Kong SAR (hereafter Hong Kong), India, Indonesia, Japan, South Korea (hereafter Korea), Malaysia, New Zealand, the Philippines, Singapore and Thailand.