The entire world has a big stake in the successful resolution of the Asian financial crisis. If Asia enters a downward spiral of economic collapse and financial default, the consequences will be severe not only for the billions of people of Asia but for the rest of the world as well. Just last week, the credit rating agencies threatened to downgrade leading European banks because of their exposure to Asia. Growth forecasts for Europe and the United States in 1998 are already being scaled back, though still only modestly. The stock markets in the U.S. and Europe could easily suffer a sharp contraction if the Asian crisis intensifies.
The entire world has a big stake in the successful resolution of the Asian financial crisis. If Asia enters a downward spiral of economic collapse and financial default, the consequences will be severe not only for the billions of people of Asia but for the rest of the world as well. Just last week, the credit rating agencies threatened to downgrade leading European banks because of their exposure to Asia. Growth forecasts for Europe and the United States in 1998 are already being scaled back, though still only modestly. The stock markets in the U.S. and Europe could easily suffer a sharp contraction if the Asian crisis intensifies.