The global crisis, originating in the US financial sector, affected the Asian region primarily through three channels – declining trade volumes, exchange rate pressure and asset deflation. The purpose of this paper is to focus on how the crisis impacted the four major economies of South Asia, viz. Bangladesh, India, Pakistan and Sri Lanka and how, by a combination of swift actions on the monetary, fiscal and exchange rate fronts, the worst consequences of the crisis were averted.
The regulatory and supervisory systems in these four economies are then benchmarked against certain desirable norms, which have emerged out of post‐crisis international deliberations.
It is felt that the South Asian regulatory systems perform fairly well vis‐à‐vis these norms.
The paper also touches upon the major highlights of the crisis impact, policy responses and post‐crisis recovery in the Southeast Asian region.
The several similarities and the few contrasts between the two regions on these aspects are also presented.
