Asia Financial Crisis——Financial Crisis And Prevention

Financial crisis is the convetging effect of globalization. Financial crisis is the loss incurred by financial institutions and investors who bear losses on investing in any financial crisis happened in South East Asia, for instance, has devalued some currencies about 56.78% and caused about 54.48% decline in stock markets. The sluggish Japanese banks and the close down of Guangdong Trust are the typical examples of the threats brought about by financial crisis. Based on the mentioned examples, we come about a conclusion. Our research and analysis conclude the general factors of financial crisis, based on the theoiy of Information Economics. Then we use Monetary theory to analyze the globally spread of financial crisis, which is bred by the existent weaknesses within the financial system itself We center our discussion on 揃ubble Economy?and the formation of financial crisis by weak internal control of a financial system. We conclude that financial crisis is avoidable and pre-cautious actions can be taken to prevent it from happening. Our beloved country shall formulate healthy regulations to ensure the continuous revolution of our financial system.