WASHINGTON -- Ten years ago this month, a financial crisis began in Asia and quickly spread, rocking economies and triggering political upheavals around the globe.
Today, Asian economies are again growing quickly as stock prices shoot to record highs. Some are wondering: Could there be another meltdown?
While economists say government actions can never entirely banish bubbles, many believe reforms are in place to prevent the latest regional boom from ending with the kind of bust seen in 1997.
"The institutions are better than they used to be," said Meredith Jung-En Woo, professor of Korean studies at the University of Michigan.
Government officials have initiated a much higher "level of monitoring of the markets to make sure there are no bubbles developing - and that's a good thing," she said.
What happened a decade ago was so disruptive that the crisis' causes are still being studied. This week at the Woodrow Wilson International Center for Scholars, experts including Woo discussed "The Asian Financial Crisis: Lessons Learned."
In mid-May 1997, the ordeal began when global investors, jittery about the substantial run-up in asset prices and large number of bad loans, concluded that Southeast Asia's currencies were overvalued and due for a sell-off.
Throughout late May and June, speculators furiously sold off Southeast Asian currencies. In July, Thailand devalued its currency, touching off devaluations in Malaysia, the Philippines, Indonesia, Taiwan, South Korea and Singapore.
As the financial crisis deepened, it shredded jobs, pummeled stocks and stirred political anger throughout Asia. By November, Japan had seen the collapse of some of its leading brokerages and banks. In January 1998, South Korea ordered the shutdown of 10 merchant banks. By May, political unrest had forced Indonesia's President Suharto to step down after 32 years in power.
The financial upheavals spread to Russia, Brazil and beyond.
Before the two-year ordeal ended, tens of millions of people had been stripped of jobs, homes, businesses and savings.
The impact in the United States was mild. The most notable effect was a stock market dive in October 1997, but that didn't last long.
Still, the Asian crisis has left a global legacy that does continue to impact Americans. For one thing, it stirred up popular resentment against globalization, spurring protests against world trade talks and helping bog down several rounds of negotiations.
In Asia, the crisis left millions of people poorer for many years. For example, per-capita income in Thailand dropped from $8,800 in 1997 to just $8,100 in 2004 - a period when it was rising worldwide from $6,500 to $8,800.
To make sure the region does not have to endure another such crisis, Asian countries have instituted many financial reforms.
For example, they have built up foreign exchange reserves to act as hedges against currency sell-offs. This month, 13 Asian nations agreed on a framework for pooling those reserves so they could respond even more quickly if a currency crisis were to begin.
In a report last month on Asia's economic health, the World Bank identified further areas for reform, especially developing capital markets and providing credit access for the poor.
One big worry these days is that China's stock prices are getting dangerously high. Several global financial firms have expressed worries about it, and are urging the government to slow the growth rate.
"There are some indications there might be bubbles or too much speculation in the stock market, so the Chinese government is trying to intervene with warnings," Woo said. If necessary, they will raise interest rates to tamp down stock prices, she predicted.
Former U.S. Commerce Secretary Donald L. Evans, who now heads the Financial Services Forum representing chief executive officers of financial services companies, said Asian nations deserve credit for bouncing back from 1997, while avoiding any new meltdowns.
"It's quite remarkable that we haven't had any more crises, in spite of how fast China has been growing," he said.
"This is all being managed pretty well now. The world is a much more stable place than it was 10 years ago."