Abstract
The subprime crisis was triggered by an expectation of defaults of payments on subprime mortgages in the US. It is an on-going crisis that has already led to the free fall of the US housing prices, billions of losses by banks, and generally speaking a slow-down (maybe a recession) of the American economy. The impact of the crisis has already been big enough so as to influence all the major capital markets of the world. On the other side, the 1997 Asian financial crisis was a major financial crisis that hit most of south-East Asia and Japan, also referred to as the East Asian currency crisis. There were fears that the crisis would grow through financial contagion, but it affected the world economy only relatively (afterwards investors were reluctant to lend money to developing countries, leading to a meltdown of these economies). Although we do not know exactly how bad the current crisis is going to be, we can say that both crises are serious. We will describe the main characteristics of the two crises and then compare them.
