currency controls and Asian banking

[Greg Nowell]

If currency conrols stop shorting of the market and
currency speculation, and lead to an increase in stock
prices, this is more important in Asian-style economies
than in our own.   Since stocks compose a significant
part of bank portfolios,  a fall in market values must
leads to a contraction of lending and associated
curtailment of economic activity.

Thus, if the Malaysian market is up 16%, that's good
news in terms of cranking up some domestic liquidity.

--
Gregory P. Nowell
Associate Professor
Department of Political Science, Milne 100
State University of New York
135 Western Ave.
Albany, New York 12222

Fax 518-442-5298