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After nearly thirty years of great economic growth many Asian countries are in recession due to many bad business decisions The Asian financial crisis caused the value of Asian currency fall 50-60 percent stock markets to decline by 40 percent property values to drop and banks to close The Asian financial crisis began in mid 1997 because of currency devaluation bad banking practices high foreign debt and corruption has lead to a decline in the currency and stock markets of all Asian countries As the financial crisis continued it soon turned into an economic and social crisis as well At the base of the financial crisis is millions of dollars in bad bank loans Many of the banks suffered from limited institutional development and a lack of governing laws Credit tended to flow towards borrowers with government relationships or private bank owners and to favored sectors rather that on the basis of projected cash flows realistic sensitivity analysis and recoverable collateral values The financial crisis began in Thailand in May of 1997 when investors became worried about Thailands political instability slowing economy and excessive debt As they invested their money in more stable markets and pulled out of Thailand the value of the baht fell sharply Due to the inter-linked economies of Asia Indonesia the Philippines and Malaysian economies were soon crippled by the fall of the baht value Indonesias economy soon fell after when the rupiah lost 80 percent of its value against the US dollar The country was plagued with more than 70 billion worth of bad debts due to a corrupt and inefficient government Indonesia and Thailand were also suffering from being to ambitious with the expansion of their infrastructures due to the huge influx of money from optimistic foreign investors Two major economies that were also effected were China and Japan Chinese banks may have been carrying up to 1 trillion
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