The long string of major financial crises that beset emerging markets from 1994 to 2002 was caused by a variety of factors, according to John Taylor, former U.S. Under Secretary of Treasury for International Affairs. Among those were countries trying to peg their exchange rates while inflation at home exceeded inflation abroad. "Essentially that means your exchange rate gets out of line or overvalued," he said. "Eventually currencies depreciated. On top of that, many emerging-market countries had borrowed in dollars, but their earnings were in local currency. A sudden depreciation meant they had to pay a lot more dollars back, which led to a debt problem." The International Monetary Fund's unpredictable responses to the crises further complicated the problem, Taylor said.