Sophisticated finance does bring benefits
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Emerging economies, having experienced the crises of 1997-98, resolved to inoculate themselves by refusing to rely on foreign financing. They kept their exchange rates cheap so as to run current-account surpluses and build up foreign reserves. That way, if their banks got into trouble and foreign financiers took flight, they would have a war chest of dollars with which to repay the foreigners and avoid a collapse in their currencies.
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