Why did investor confidence drop so quickly during the 1997 Asian Financial Crisis?
Answer (1)
Investor confidence dropped quickly because investors realized something that many Southeast Asian countries had in common.overvalued real estate marketsrisky bank lendinglarge amounts of short-term debt When Thailand’s baht collapsed, investors feared the same thing would happen in other countries. This panic spread fast, and instead of waiting to study each economy, investors withdrew their money from the region as a whole. The fear of losing money became stronger than the facts, and that loss of confidence caused currencies and stock markets to crash.
