While the Latin American Debt Crisis of the 1980s and the East Asian Financial Crisis of 1997 generally both stemmed from overborrowing from foreign lenders, the type of crisis that unfolded depended on the level of government intervention prior to the crisis and the type of crisis (fiscal or currency-based) determined the rapidity of the crisis’ development. In Latin America, heavy government intervention in the import substitution model created a heavy reliance on foreign loans, with too much capital being used for consumption. In contrast, the financial liberalization in the 1990s in East Asia created a lack of national financial supervision, causing massive inflows of foreign capital to private sources, making these sources dependent on foreign loans as well. However, the public debt of Latin America created a gradual fiscal problem in which countries no longer could service their loans, causing defaults, whereas in East Asia a few defaults caused by the real estate bubble crash led to the sudden panic of foreign investors, triggering a currency crisis and then a widespread default of Asian financial institutions. Thus, in Latin America, defaults caused destructive capital flight while in East Asia, investors speculated currency devaluation and therefore their capital flight caused further and rapid defaults.