Roubini.

• Position: Crony capitalism in Korea - Brief Article

In the first session, there was an evident split on the panel between those who see the crisis as the product of severe structural weaknesses in the economy and those who see it mainly as a liquidity crisis. To those who hold the first view, the crisis was an almost inevitable punishment for the sins of "crony capitalism." Those who hold the second view typically admit that there were mistakes in economic management, but they also point to such factors as contagion effects from other countries and the herding behavior of foreign investors. Roubini was the clearest exponent of the structural weakness view, highlighting twelve vulnerabilities -- ranging from the bankruptcy of a number of the chaebol to significant political uncertainty -- already apparent in early 1997. Offering the perspective of the former government official, Koo argued for the liquidity crisis view. He contended that the essence of the crisis was that foreign banks refused to roll...