Question

One of the causes of the financial crisis in 1997-98 was..  (only one answer)

Foreign capital inflow was mainly long-term debt, and it was used to finance short-term investment projects
Foreign capital inflow was mainly long-term debt, and it was used to finance long-term investment projects
Foreign capital inflow was mainly short-term debt, and it was used to finance long-term investment projects
Foreign capital inflow was mainly short-term debt, and it was used to finance short-term investment projects​


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Answer 1

Answer:

Perhaps most of all, the 1997–98 financial crisis revealed the dangers of premature financial liberalization in the absence of established regulatory regimes, the inadequacy of exchange rate regimes, the problems with IMF prescriptions, and the general absence of social safety nets in East Asia.