Asian nations urged to move toward financial integration
CHERYL M. ARCIBAL, GMANews.TV
09/18/2008 | 04:04 PM
MANILA, Philippines - The Asian Development Bank urged countries in the region to move forward with financial integration in the light of the US fallout.
In a speech to the participants of “The Changing Financial Environment, Policy Issues and ADB’s Role in Financial Sector Development," Haruhiko Kuroda, ADB president, told participants that an integrated financial system to promote stability in the region.
Although Asia remains the fastest growing region, it is still vulnerable to the external turmoil such as the US subprime crisis, which led to the collapse of investment houses like Bear Stearns, Lehman Brothers and funding concerns of Merril Lynch and insurance giant American International Group.
“It is now time for Asia to move forward on its path toward greater financial integration and to develop the foundations for regional financial stability. Despite the rapid pace of regional trade integration, for example, financial integration has lagged behind. Asia still relies heavily on the more developed financial sectors in Europe and North America to intermediate excess savings," Kuroda said.
He noted that although financial centers in the region such as Hong Kong, Japan, and Singapore have already adopted stringent banking standards such as Basel II, other countries in the region needed to catch up.
Kuroda said the Asia must improve surveillance of the region’s financial markets.
He said the ADB is promoting an “Asian Financial Stability Dialogue", including finance ministries, central banks, and other financial regulators an supervisors, to coordinate regulatory department.
“It could monitor potential financial vulnerabilities, through the use of objective early warning systems and other mechanisms. And it could engage the private sector in financial market development," Kuroda said.
He also noted that promoting consistent standards and mutual recognition will make it easier for investments to come in the region.
Another step for an Asian financial integration is the strengthening of the financial market infrastructure.
“Our region requires deeper and perhaps more innovative financial markets," he said.
The fourth step is to “prudently liberalizing cross-border financial services and capital accounts."
“For Asia, the fallout from the global market turbulence shows how closely linked we are to global markets. Even if subprime-related losses have to date been lower than elsewhere, this is no guarantee recent events will not affect major Asian financial institutions," Kuroda said. - GMANews.TV
In a speech to the participants of “The Changing Financial Environment, Policy Issues and ADB’s Role in Financial Sector Development," Haruhiko Kuroda, ADB president, told participants that an integrated financial system to promote stability in the region.
Although Asia remains the fastest growing region, it is still vulnerable to the external turmoil such as the US subprime crisis, which led to the collapse of investment houses like Bear Stearns, Lehman Brothers and funding concerns of Merril Lynch and insurance giant American International Group.
“It is now time for Asia to move forward on its path toward greater financial integration and to develop the foundations for regional financial stability. Despite the rapid pace of regional trade integration, for example, financial integration has lagged behind. Asia still relies heavily on the more developed financial sectors in Europe and North America to intermediate excess savings," Kuroda said.
He noted that although financial centers in the region such as Hong Kong, Japan, and Singapore have already adopted stringent banking standards such as Basel II, other countries in the region needed to catch up.
Kuroda said the Asia must improve surveillance of the region’s financial markets.
He said the ADB is promoting an “Asian Financial Stability Dialogue", including finance ministries, central banks, and other financial regulators an supervisors, to coordinate regulatory department.
“It could monitor potential financial vulnerabilities, through the use of objective early warning systems and other mechanisms. And it could engage the private sector in financial market development," Kuroda said.
He also noted that promoting consistent standards and mutual recognition will make it easier for investments to come in the region.
Another step for an Asian financial integration is the strengthening of the financial market infrastructure.
“Our region requires deeper and perhaps more innovative financial markets," he said.
The fourth step is to “prudently liberalizing cross-border financial services and capital accounts."
“For Asia, the fallout from the global market turbulence shows how closely linked we are to global markets. Even if subprime-related losses have to date been lower than elsewhere, this is no guarantee recent events will not affect major Asian financial institutions," Kuroda said. - GMANews.TV
