An American sin of omission

The dramatic story was a familiar one, and it was recounted rather well - at least, for the most part. About 10 years ago, a cluster of Asian countries exposed their currencies to hostile elements, running huge foreign-loan deficits that suddenly could not be repaid. They watched helplessly as their once-vibrant economies sank.

The result was the Asian financial crisis which, for two years, rocked East Asia like nothing had since the second world war.

Millions of wage earners were thrown out of work, companies collapsed, entire economies went begging (mainly to US-based international financial institutions) and the world economy seemed on the verge of a near-death experience.

The narrator of the tale was Janet Yellen, chairwoman of the American President's Council of Economic Advisers under former president Bill Clinton. Now she is president of the Federal Reserve Bank of San Francisco.

As her retelling unfolded in a speech entitled 'The Asian Financial Crisis Ten Years Later' - delivered recently to an audience of members of the Asia Society's Los Angeles branch and the Pacific Council on International Policy - it was clear that the Yale-educated economist was no Asia-basher.

Dr Yellen saw a lot to like in today's Asia. She liked the overall greater economic transparency of firms and governments, which allows better evaluation by would-be investors; and the closer attention given to tricky policy issues, such as the use of exchange-rate structures to rein in currency volatility.