|262However, thedistinction between prudential policiesandcapital controlsisnotalwaysclear[Ariyoshiet<br>|
|---|
|al(2000: 32)].<br>|
|263Ariyoshietal(2000: 39-40)|
|264IMF(2001d:167-169)|
|**265**Fan (2002:166)claims, "therehasnever beenareal caseofsequencing,exceptforsome technical<br>preparationsforacertainstepofmarket liberalisation."<br>Fan(2002:165)<br>267Fan(2002:165)<br>|
|**268**Fan(2002:166)|
|269Anotherproblemwithsequencingisthatitisdifficulttodetermineatwhatpointastephasbeen<br>completedsothatthenextstep canbetaken.Incompatible openingitisdifficulttoknowwhichpolicies<br>arecompatible,butit requiresno"check points,"onlythat small stepsbetakenin allareasfromwhich|
|achievementswillaccumulate.Itcouldthusbemorechaoticthansequencing.[Fan(2002:166)]<br>270Fan(2002:167)|
|271Fan(2002:158)|
|**272**While thisistheviewofmanyintheregion,therearethosewhodisagree.Eichengreen(2001)views<br>monetary cooperation(tostabilizeexchangerates)andfinancial cooperation(tostrengthenbanking<br>|
|systems)asseparateanddistinctwith thelatterbeingofahigherpriority thantheformer.|
|<br>23Descriptionsofcommoncurrencyregimes(asidentifiedbytheIMF)arepresentedintheGeneral|
|Appendix.|
|274Theywereactually"soft"pegstobaskets composedoftheU.S.dollar,Japaneseyen,German markand|
|other Europeancurrencies, buttheweightoftheU.S.dollarwasdominant(Yamazawa,1998).|
|**275**SeeTableG.9inappendixfordescriptionsofcommonexchangerateregimes.|
|<br>276Realestate developershad borrowedindollars(unhedged)fromdomesticbankstofinance realestate|
|projects.|
|277RadeletandSachs (2000:115)|
|<br>278Radelet andSachs (2000:137)|
|279Nocountryusesacompletelyfreefloatingexchangerate.Countriesthatareconsideredtobefree|
|floaters(suchasthe U.S.and Japan)willonoccasion intervenewithmodestsmoothingwhenabsolutely|
|necessary.|
|**280**Calvo andReinhart(2000:26)|
|<br>**281**Frankel, Fajnzylber,Schmukler,andServen(2000:8)<br>**282**McCauley(2001:9)|
|283Theauthorsarguethatatheoretical rationaleforthetwo-comerpropositionislackingandtheyreject|
|otherpossibleexplanations(i.e.,theimpossibletrinity,thedangersofunhedgedforeign liabilities,and|
|govemmentreluctancetoabandonshipintime)asnotconvincing.[SeeFrankel,Fajnzylber,Schmukler,<br>andServen (2000)foradetaileddiscussion.]|

2S4 A pegged exchange rate within a horizontal band - the value of the currency is maintained within margins of fluctuation around a formal or de facto fixed peg that are wider than plus or minus I percent around a central rate (parity). There is some limited degree of monetary policy discretion, with the degree of discretion depending on the bandwidth.

285 Asian Policy Forum (2000: 4) 286 Larrain and Velasco (1999: 11-12) and Glick (2002: 202-203) 287 See Table G. 9 and G. lOin the General Appendix for descriptions of exchange rate regimes and monetary policy frameworks, -respectively.

288 Williamson (2001: 97) 289 Williamson (2001: 97) 290 Calvo and Reinhart (2000), Frankel, Schmukler and Serv6n (2000), and Benassy-Quere and Cceur6 (2000) 291 McCauley (2001: 25). The author reconciles the findings of McKinnon (2000) with his own contrary findings in his Appendix A, page 46.

292 De Brouwer (2001: 58) 293 Kwan (2001: 75) with categories based on Eichengreen (1994) and Frankel (1999b). **294** Frankel (1999b: 6) 295 Kwan (2001: 77-78) 129