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"The Causes of Contagion, in Crisis Times, and Policy Implications For Market Regulation."  

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IFCM Module: Market Regulation Financial Crises and Contagion By Andrew Hedley Essay Title: "The Causes of Contagion, in Crisis Times, and Policy Implications For Market Regulation." Source: https://courses.stu.qmul.ac.uk/smd/kb/pathology/ Content Page number 1. Introduction & Definitions 1 2. Causes of Contagion * Fundamental Causes * Investors' Behaviour 3 3. Case Study: Interwar Period (1930's) 7 4. Case Study: South East Asia Crisis (1997) 10 5. Policy Implications for Market Regulation 15 6. Conclusion 17 7. References and Bibliography 19 8. Appendix: World Bank's Definitions of Contagion 22 1. Introduction The current debate about contagion has stemmed from an upsurge in interest during the second half of the 1990s in the spread of financial crises from their source country to others. The following quote by Hale at the time of the Asian crisis poignantly captures policy makers' apprehension and frustration with financial contagion: "What's going on in Asia is nothing short of a contagion of awesome, profound effect . . . The speed and the ferocity of the crisis as it cascaded through Asia and...

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