The Stern School of Business is a leading center of research on the Asian crisis. Our faculty and students have been deeply involved in studying and thinking about the Asian crisis: writing papers and books, participating in conferences, seminars and policy panels at Stern and outside, giving policy advice, traveling to the region, and doing consulting work. The varieties of activities undertaken by our faculty and students is very broad and confirms the role of Stern as one of the central institutions of study and research on important current policy issues.


The Stern faculty activities on the Asian crisis have taken many forms. Specifically:

    Professor Nouriel Roubini has developed and maintains the largest and most systematic home page on the Asian Crisis; with over 30,000 hits per month, this is the leading world resource for information, analysis and discussion of the Asian Crisis used by scholars, researchers, students, policymakers and investors around the world. He has also written several research papers on the crisis, participated to a number of panel discussions on the crisis and presented his work at the United Nations, the New York Federal Reserve Bank and several academic avenues.

    Professor Ingo Walter has been involved in two projects dealing with Asia that led to two publications: High-Performance Financial Systems: Blueprint for Development (Singapore: Institute for Southeast Asian Studies, 1994). 122pp. and "Rethinking Emerging Market Equities," Journal of Applied Corporate Finance, January 1998 (with Roy Smith). The former deals with redesign of Asian financial systems, focusing on Singapore;  the latter deals with emerging equity markets, including the Asian context.

    Professor Richard Levich traveled to the region twice: in December 1997 to Bangkok, to teach a course in international finance at Chulalongkorn University;  in April 1998 to Seoul Korea and Shanghai China, to accompany the Stern Executive MBA in Finance 1999 Class on their visits to corporate and government offices.

    Professor Stephen Brown has written a paper on "Hedge Funds and the Asian Currency Crisis of 1997" (jointly with William N. Goetzmann and James Park). They test the hypothesis that hedge funds were responsible for the crash in the Asian currencies in late 1997. To do so, they develop estimates of the changing positions of the largest ten currency funds in one currency, the Malaysian ringgit and to a basket of Asian currencies. They find that the net long or short positions in the ringgit or its correlates did fluctuate dramatically over the last four years. However, these fluctuations were not associated with moves in the exchange rate. The estimated net positions of the major funds were not unusual during the crash period, nor were the profits of the funds during the crisis. In sum, They find no empirical evidence to support the hypothesis that George Soros, or any other hedge fund manager was responsible for the crisis.

    Professor J.P. Mei has recently published a book on emerging markets "Global Bargain Hunting" (co-authored with Burton Malkiel). He is also teaching a highly popular MBA course on Emerging Markets Finance.

    Professor Richard Sylla taught a course on "Financial History," which studies how financial systems have developed over the past several centuries, including periodic outbreaks of financial crises and the general characteristics of such crises. He discussed aspects of the Asian crisis and how it is both similar to, and differs from, history's "usual" crises.  He also wrote a paper on "Emerging Markets in History: The U.S., Japan, and Argentina," and gave it at a conference in Japan in January.  A major lesson of history that emerges from the paper is that countries ought to take measures to develop solid domestic financial systems either along with or before becoming large-scale importers of capital from abroad.
 

    Professor Sang Yong Park, a visiting faculty member in finance from Yonsei University in Korea is  writing a paper about "Financial Reform and its Impact on Corporate Organization in Korea," to be delivered in the 24th PAFTAD ( Pacific Trade and Development) Conference. The  paper examines critical elements of financial reform that will have bearing on changes in corporate organization and governance.
 


The Stern school and its research centers have also been involved in organizing a number of events related to the Asian Crisis. In particular:

    In January 1998, Dr. Paul Volcker, the former Chairman of the Federal Reserve System and former CEO of James Wolfensohn Inc., gave a talk to a standing room Stern audience on "Asia and the World's Global Finance". He will be back to Stern as the Henry Kaufman Visiting Professor at the Stern School for the academic year 1998-99.  A distinguished public servant and business leader, Mr. Volcker will teach in several curricular areas including leadership, international finance, and financial institutions.

    The Stern and Wagner Schools have planned a forum on the Korean economic crisis  in conjunction with the Korean Economic Institute of  America, the U.S. Department of State and the Embassy of the Republic of Korea. It will be held in the King Juan Carlos I of Spain Center at 53 Washington Square South on Friday, May 1, 1998.

    The Stern Center for Japan-U.S. Business and Economic Studies has been very active in following the crisis.
    In March 1998, it organized a panel on  the "Asian Financial Crisis" with participation of  Takashi Mori, Managing Director and General Manager, Sanwa Bank, New York Branch;  Merton Miller, Professor Emeritus, University of Chicago and Nobel Prize Laureate;  James Tobin, Professor Emeritus, Yale University and Nobel Prize Laureate and Richard Zeckhauser, Professor of Political Economy at John F. Kennedy School of Government, Harvard University; the moderator was Marti Subrahmanyam, Professor of Finance, Economics and International Business at Stern.
    In February, the Center  organized a public lecture on  "New Trends in International Banking"  with the participation of  Paul A. Samuelson, Long-Term Credit Bank of Japan Visiting Professor of Political Economy at The Center for Japan-U.S. Business and Economic Studies, Stern School of Business, NYU;  Tetsuo Makabe, General Manager, New York Branch and Chairman, Long-Term Credit Bank of Japan Trust Company;  Richard Sylla, Henry Kaufman Professor of the History of Financial Institutions and Markets, and Professor of Economics, Stern School of Business.
    In March it organized a forum on "Japan's Financial Crisis and the Myth of Main Bank Governance" with the participation of  Mark J. Scher, Senior Research Fellow, Institute for Financial Affairs, Inc. (KINZAI), New York Office.
 

Moreover, a number of distingushed visitors came to Stern to talk about various aspects of the Asian Crisis and the international financial system:

* Sir Andrew Large, former chairman of the Securities and Investment Board, the chief British regulator, visited the Stern School in February 1998 to talk about global financial regulatory issues.

* On April 15, 1998 Anthony Francis Neoh, Esq. visited Stern and met with the faculty at the school.  Mr. Neoh is Chairman of the Hong Kong Securities and Futures Commission (HKSFC) and is Senior Counsel of the Hong Kong Bar and is also a member of the English and California Bars.  Mr. Neoh will be stepping down as the Chairman of the HKSFC to concentrate on the practice of law and may be interested in an academic appointment or some variation thereon.  He has made a presentation on some of the issues involved in the Asian financial crisis  to our Executive MBA Students when they were in Hong Kong on their international study tour.

* In April 1998, the International Business Area hosted a lunch for Hon. Ivan Pilip, the
Minister of Finance of the Czech Republic. Developments in the Czech Republic and Central/Eastern Europe more generally were discussed in this informal setting. After serving as Minister of Education from 1994-1997, Mr. Pilip became Minister of Finance in 1997.  During his tenure the Czech Republic created an SEC-type regulatory body and improved enforcement of existing financial-market regulations.  The Czech government has also confronted a worsening external balance, a currency crisis in the spring of 1997 with changes in government macro policies.
 

The students groups at Stern have been very active in following the crisis with a series of panels on various aspects of the crisis.  In particular:

    In November 1997, Paul Dickson, Emerging Markets Strategist at Lehman Brothers, explained the economic causes of the reactions, an event organized by the Stern Emerging Markets Association.

    The same month a panel on the Asian crisis was organized by Emerging Markets Association, Association of Investment Managers and Graduate Finance Association. The participants were: Rick Buckholtz,  Portfolio Manager from Goldman Sachs Asset Management, Frank Fernandez,   CEO of Global Emerging Market Advisors and Hans Humes,  Managing Partner of Van Eck Capital.

    The Emerging Markets Association, the Graduate Finance Association and Entrepreneurs Exchange organized a further talk on Asia in November where the speaker was Rogers Leeds, Managing Director of Patricof Emerging Markets.

    The Emerging Market Association organized a panel in March 1998 with the participation of Stern's Professor Roubini and two market participants from Standard and Poors and Lehman Brothers.

    The Asian Business Society organized its Fourth Annual Conference in April 1998 on "Business Practices in Asia: Challenges in Implementation" The conference saw the  the participation of a large number of investors, scholars and entrepreneurs.  As the Asian Tigers develop and implement reconstruction plans to stabilize their economies, companies are facing new challenges on how to conduct business in Asia. The challenges in implementation in Asia vary in  scope, from understanding the dynamics of the Asian currency crisis and its impact on profitability, to providing consulting services to
closely held and managed family businesses in Hong Kong and Singapore. The conference focused on addressing the everyday challenges that both foreign and regional companies face.

    The Stern Japanese Business Association organized a panel discussion about the role of Japan in the crisis with the participation of Professor Roubini, Mr. Kajihara from the Sanwa Bank and two Stern graduate students.
 
    The Stern Executive MBA in Finance 1999 Class organized a trip to Seoul, Korea and Shanghai, China in April 1998 visits to corporate and government offices.