This Case is About EMERGING MARKETS, POLICY
PUBLICATION DATE: April 15, 2002 PRODUCT #: 702040-PDF-ENG
Malaysia: Capital and Control Case Solution
In response, the government of Malaysia imposed currency and capital controls on September 1, 1998 to the fiscal crisis that had swept Asia. The managements ignited an enormous controversy in the world of international finance.
Some observed the controls for insulating the Malaysian market from the global financial system that was deemed unstable. Some criticized the authorities for making the investors trapped while they supposedly protected the vested interests of those the critiques deemed as government’s cronies.
This argument also raised the essential question about the future of the international financial architecture: What’s the proper balance between financial market liberty and government discretion in the management of the global economy?
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