Relationship between liquidity and recent crises  A glance at the history of global capital flows over the last 20 years suggests that the liquidity cycles that posed a threat to global financial stability originated in both advanced and emerging economies. Until 1997, Asia drew in almost half of the total capital inflow into developing countries.
The economies of South-East Asia, in particular, maintained high interest rates that attracted foreign investors looking for high rates of return. The region received large inflows of money and saw dramatic increases in asset prices. At the same time, the region experienced high growth. This achievement was widely acclaimed as being part of the “Asian economic miracle”.