How Malaysia Overcome Financial Crisis 2008

Malaysia like most southeast asian. Commodity prices in the second half of 2008 saw malaysia s gdp moderate to 0 1 in the final quarter of 2008. Malaysia has learned from the asean financial crisis in 1997 1998 and much stronger position when entered the global financial crisis in 2008.

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Throughout the period of the global financial crisis underpinned by a strong financial sector and negligible exposure to subprime related assets and affected counterparties.

How malaysia overcome financial crisis 2008. Similar to its neighbors malaysia went through a currency crisis and a banking crisis but its low level of external debt spared it from an external debt crisis. In a classic empirical study cerra and saxena 2008 look at the effects of financial crises over a 10 year horizon using a panel of 190 countries from 1960 to 2001. The research explains and compares how singapore and malaysia dealt with the asian financial crisis.

Financial sector after the asian financial crisis to be more resilient and hence were able to avoid a financial meltdown. Real estate to plummet damaging financial institutions globally culminating with the bankruptcy of lehman brothers on september. It also shows a timeline of crises faced by singapore and how this has enabled our county to grow in times of adversity.

The peak estimated output loss from a financial crisis in their sample is almost 8 with output losses of around 7 at a 10 year horizon. The financial crisis of 2007 2008 also known as the global financial crisis gfc was a severe worldwide financial crisis excessive risk taking by banks combined with the bursting of the united states housing bubble caused the values of securities tied to u s. Besides during the economic crisis in 2008 the bank system has a sufficient capital to recovery from the crisis and malaysian authorities had limited exposure to foreign bank borrowing.

It shows how the government of both countries came up with strategies to overcome the crisis. Malaysia s economic vulnerabilities stepped up significantly from early 1997 through the period following the onset of the crisis in mid 1997 as market confidence increasingly diminished along with the rest of the region. Following the 2008 09 global financial crisis that especially hit the united states and europe many hundreds of billions of dollars rushed to emerging markets including malaysia in search of.

Malaysia and some asean countries will be able to overcome the global financial crisis because their economies are resilient supported by pro growth and proactive policies a visiting don said. Our analysis of the impact of the recent global financial crisis on malaysia therefore begins with an understanding of the asian financial crisis of 1997 9 and how it shaped this crisis.