Indeed, we have observed some investment funds exploring the possibility of disintermediating dealers by lending cash against securities  5  See, for example, Gary Gorton and Andrew Metrick (2010), “Regulating the Shadow Banking System,” Brookings Papers on Economic Activity (Washington: Brookings Institution, Fall).
The currency crisis then interacted with financial system weaknesses to produce a deep economic recession. And the difficulties in Thailand were rapidly propagated across the region and beyond. From this experience, the most important regulatory consequence to be drawn is the need for rapid strengthening of financial systems.