Part 6/10:
When the economic environment shifted after July 1997 due to rising U.S. interest rates, it became a tipping point for an already precarious situation.
Thailand: The Tipping Point
Thailand’s experience serves as the primary case study for this crisis. Amid the economic boom, the Thai government constructed an international financial center in Bangkok, hoping to rival financial hubs like Singapore and Hong Kong. However, a lack of effective regulations and oversight allowed financial institutions to lend recklessly, accumulating massive debts despite increasing defaults. As these banks issued loans backed by dubious collateral, they inflated their earnings reports to secure dividends and bonuses.