For seven years, Japan has encouraged banks to carry as good assets old mortgages on real estate now worth perhaps a quarter of face value. Korean multinationals, known as chaebol, have been permitted to conceal their subsidiaries' losses by shifting loans from one set of books to another. In Thailand, banks were allowed to carry loans at par until the borrowers hadn't paid interest on them for more than a year. But governments and central banks vouched for the zombie banks, which were able to keep borrowing dollars from banks in other countries. The dollar-denominated loans are devastating the Asian markets.
Debtors have to sell the local currency to acquire dollars so they can pay their debts.
This can become a death spiral for the local economy. If good information about what was going on in these countries had been available, many of these loans would not have been made. Honest Asian businesses would not be ravaged by declining exchange rates and rising interest rates, and the world would not have to fear further collapse in Asia. There is a systemic fault here, because the mixture of bank loans and portfolio investments on which the Asian countries have relied to fund their economic development is inherently unstable. Banks accumulate information and keep it for their own exclusive use.