external balances. Their aim is to strengthen ﬁnancial systems, improve governance and transparency, restore economiccompetitiveness,
and modernize the legal and regulatory environment.
The conditions that the IMF imposed on Thailand, Indonesia and Korea
in exchange for IMF-led rescue packages consisted of three basic components. The ﬁrst concentrated on macroeconomic policy reform, in particular
(a) the introduction of tight ﬁscal and monetary policy (i.e. an increase in
interest rates and the adoption of strict limits on the growth of money
supply), in order to