The Global Financial Crisis: Impact on Asia and Emerging Consensus

Publication | February 2011

The financial crisis, initially traced to subprime mortgage market in the United States (US) and the resulting deleveraging process by global financial institutions involved in highly complex financial transactions, marks the first global financial crisis of the 21st century. Few countries linked to the global financial markets and international trade were spared from the sudden downturn as the financial system imploded in September 2008. The propagation or succession of interlinked events was visible to all - from the sudden and unexpected freezing of the securitization industry to the ensuing adjustment through shrinking of bank balance sheets and the resulting pervasive flight to quality. The confluence of these events wreaked havoc across markets and countries around the world.

In the US, the credit squeeze and the ensuing impact on real estate and housing asset markets led firms and households to reduce spending, resulting in a sharp economic slowdown. Across the rest of the world, economies reeled as banks began calling in loans to reduce the large counterparty credit risk, including those in seemingly riskier emerging markets. These first round effects soon gave way to second round effects through slower export demand, further weakening global economic growth.


  • Introduction
  • The Impact fo the Crisis on Asia and Policy Measures Adopted
  • ADB's Countercyclical Support Program
  • Global Financial Crisis: What Have We Learned?
  • Conclusion
  • References

Additional Details

  • Economics
  • Finance sector development

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