A 1998 crisis highlighted the vulnerability of Hong Kong's currency to speculators, raising questions about its use of 'war chest' firepower.

In the summer of 1998, the usually placid air at the Hong Kong Monetary Authority’s headquarters in Citibank Tower suddenly evaporated as regional currencies collapsed like dominoes. Rapacious speculators had shorted currencies such as the Thai baht, the Indonesian rupiah and the Korean won and had profited handsomely. The contagion looked like it would also bring the Hong Kong dollar to its knees. As storytellers from the era have recalled, that sweltering month of August, the “wolves” were at....