On 1 September 1998, the government of Malaysia currency and capital controls in response to the financial crisis that had swept Asia. The controls sparked a huge controversy in the world of international finance. Some celebrated the controls for the isolation of the Malaysian economy from the unstable international financial system. Others criticized the controls for capture of investors and for the government to protect the interests of “cronies”. This debate was also on the central … Read more »

On 1 September 1998, the government of Malaysia currency and capital controls in response to the financial crisis that had swept Asia. The controls sparked a huge controversy in the world of international finance. Some celebrated the controls for the isolation of the Malaysian economy from the unstable international financial system. Others criticized the controls for capture of investors and for the government to protect the interests of “cronies”. This debate also raised the central question of the future of the international financial architecture: What is the right balance between freedom and financial market

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Rawi Abdelal,
Laura Alfaro
Source: Harvard Business School
31 pages.
Publication Date: Apr 15, 2002. Prod #: 702040-PDF-ENG
Malaysia: capital and control HBR case solution

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