The Evidence and Impact of Financial Globalization

Chapter 45

Financial Globalization and the Russian Crisis of 1998

B. Pinto* and S. Ulatov^†

^*World Bank, Washington, DC, USA

^†World Bank, Moscow, Russia

Outline

Introduction

Global Context

The Country Crisis

Russia’s 3-year Road to the 1998 Crisis

The Stabilization Program

Impact on the Enterprise Sector

Impact on Government Debt

The Crisis and Eventual Meltdown

Financial Globalization and Russia 1998

Improving Sentiment

Capital Inflows

Russia’s Banks

Moral Hazard

Financial Globalization and the Meltdown

Lessons and Insights from Russia 1998

Concluding Remarks

Acknowledgment

Glossary

References

Introduction

Russia’s 1998 meltdown is yet another instance of financial globalization being linked to a crisis in an emerging market instead of better ...