Myanmar's Banking Crisis

In early 2003 Myanmar experienced a severe banking crisis. Triggered by a collapse amongst a cohort of informal finance companies, the resultant panic quickly sparked a crisis of confidence in the country's nascent private banking sector. Prompt and credible liquidity support to the banks could have limited the damage, but Myanmar's monetary authorities proved unequal to the task. This paper examines the course taken by Myanmar's latest financial crisis, presents a critique of the policy responses to it and concludes with some thoughts on how the damage it wrought on the real economy could have been avoided.