Cover image for The chastening : inside the crisis that rocked the global financial system and humbled the IMF
The chastening : inside the crisis that rocked the global financial system and humbled the IMF
Blustein, Paul.
Personal Author:
First edition.
Publication Information:
New York : Public Affairs, [2001]

Physical Description:
xvi, 431 pages ; 25 cm
Reading Level:
1460 Lexile.
Format :


Call Number
Material Type
Home Location
Item Holds
HB3808 .B58 2001 Adult Non-Fiction Central Closed Stacks

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"In the late 1990s, despite a spectacular stock market boom in the United States, all was not well with the global economy. In rapid succession, Thailand, Indonesia and South Korea spiraled toward economic collapse as international bankers and money managers lost confidence that these nations could repay their debts and maintain the value of their currencies. And as the Asian financial crisis smoldered and flared, the embers spread to Russia and Brazil, bringing the U.S. economy perilously close to disaster in the process." "In this inside look at how the crisis unfolded, Paul Blustein shows how the financial turmoil in Asia caught the International Monetary Fund by surprise and overwhelmed its legions of Ph.D.'s in their efforts to protect against economic destabilization. Over the years, the IMF has cultivated the image of an institution whose masterminds coolly dispense effective economic remedies, but the Asian flu nearly proved too much for the doctors to handle. As markets were sinking and defaults looming, the guardians of global financial stability - IMF officials together with their overseers in the Group of Seven major industrial countries - were often floundering, improvising, feuding among themselves and striking messy compromises. In a world where capital flowed across national borders in much more massive quantities than ever, they were woefully ill-equipped to combat these virulent new strains of investor panics."--BOOK JACKET.Title Summary field provided by Blackwell North America, Inc. All Rights Reserved

Author Notes

Paul Blustein, a staff writer at The Washington Post, has covered business and economic issues for more than twenty years. He reported on the global financial crisis of the late 1990s for the Post and served as one of its correspondents in Asia from 1990 to 1995. A graduate of the University of Wisconsin and a Rhodes Scholar at Oxford University, he has also worked at Forbes and The Wall Street Journal, and he is a recipient of the Gerald Loeb Award, the most prestigious honor in business journalism. He lives in Bethesda, Maryland

Reviews 3

Booklist Review

Blustein covered the global financial crises of the 1990s for the Washington Post, then took a sabbatical to write this analysis of the efforts of the International Monetary Fund (IMF) and other key policymakers to contain those crises. Drawing on some 200 interviews with participants in the campaigns to stabilize the economies of Thailand, Indonesia, Korea, Russia, and Brazil, Blustein demonstrates both the narrowness of the IMF's philosophical approach and the gross inadequacy of its economic arsenal in the face of a billion-dollar daily cash flow across international borders. But Blustein doesn't share antiglobalization demonstrators' disdain for the IMF: his "bad guy" is "the Electronic Herd": institutional investors who push too much money into a nation such as Thailand when prospects look good and then race to withdraw it at the first whisper of trouble. Blustein would empower the IMF to impose "standstill" arrangements (parallel to bankruptcy) to force these short-term investors to participate in solving the gigantic economic problems they've helped to create. --Mary Carroll

Library Journal Review

While not an economic treatise, this marvelous work by Washington Post staff writer Blustein provides an in-depth look at the International Monetary Fund (IMF) and its 1997-99 crisis-fighting efforts in Thailand, Indonesia, South Korea, Russia, and Brazil. Using firsthand interviews, the author provides a brief history of the IMF, a critical look at the institutions and mechanisms involved in IMF programs, and an effective portrayal of their relationship with other key players in international finance, including the U.S. Treasury, the U.S. Federal Reserve, the G-7, and the World Bank. Noting that the IMF was created to help countries correct problems in their economic fundamentals, the author contends that, owing to globalization, liberalization of the international currency market, and the emergence of what the author describes as the "Electronic Herd" of nontraditional economic interests, institutions like the IMF must adapt to ever-increasing challenges and evolve to meet these challenges. To this end, Blustein offers a number of noteworthy ideas for solving existing problems and fixing the international financial architecture. Recommended for both academic and public libraries.-Norm Hutcherson, California State Univ., Bakersfield (c) Copyright 2010. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.

Choice Review

From 1997 to 1999, the international financial reserves of five countries--Thailand, Indonesia, South Korea, Russia, and Brazil--plummeted as panicking foreign bankers and creditors lost confidence in these countries' ability to meet their debt obligations. Into the raging torrent of capital outflows waded the International Monetary Fund, the institution charged with responsibility for maintaining financial stability in the global economy. The mixed results of the efforts are documented in a clear and readable style by Blustein, a staff writer at The Washington Post, who covered global financial crises of the late 1990s. Research for the book is based on his extensive interviews with top officials and staffers of the IMF, the US Treasury, the Federal Reserve Board, the World Bank, and other institutions involved in maintaining orderly international financial markets. Bankers, fund and bond traders, and academic economists also are included among his sources of information. His presentation not only captures the course of events but also describes governance structures, policy issues, and personalities involved. The book concludes with consideration of changes to the international financial system. Recommended for public, academic (lower-division undergraduate and up), and professional library collections. E. L. Whalen Clark College

Table of Contents

Author's Note and Acknowledgmentsp. ix
1 The Committee to Save the Worldp. 1
2 Opening the Spigotp. 19
3 Winnie the Pooh and the Big Secretp. 51
4 Malignancyp. 85
5 Sleepless in Seoulp. 117
6 The Naysayersp. 151
7 The Bosun's Matep. 175
8 Down the Tubesp. 207
9 Getting to Nyetp. 235
10 The Balance of Risksp. 279
11 Plumbing the Depthsp. 305
12 Stumbling Outp. 337
13 Cooling Offp. 371
Notesp. 389
Indexp. 422