In summer 1997, the high-performing East and South-east Asian economies faced a financial crisis of unprecedented proportions. In a matter of weeks, once-vibrant economies and their strong currencies witnessed a meltdown, forcing them to turn to that lender of last resort, the International Monetary Fund (IMF), for assistance. A careful examination of the long-term as well as the immediate causes of the crisis refutes the widely held view that no one predicted the crisis. The crisis could have been avoided if the over-exuberant Asian governments had heeded the IMF's early warning. The IMF's policy prescriptions are not only working, but those states in the region that follow them will do best.