Challenges and Developments in the Financial Systems of the Southeast Asian Economies
AbstractThis paper discusses the economies and financial systems of Southeast Asia (SEA) and focuses on challenges and developments in the region. Despite the diversity of SEA economies and some important exceptions, most of them are relatively small but growing strongly. Financial deepening differs among SEA economies. Yet in general, equity markets have grown rapidly and bond markets slowly. The main vulnerabilities of the SEA economies stem from volatile capital flows as well as from decreases in export demand. As a result of national and regional policy responses to the Asian Crisis of 1997/98, the soundness of banking systems has improved, and frameworks to deal with foreign currency liquidity problems and to develop bond markets have been established. Due to these efforts, SEA economies have shown considerable resilience during the current global financial and economic crisis. In some economies, macro-prudential measures may have contributed to this resilience. Capital flows during the current crisis have reminded regional authorities of the risks inherent in these flows. Remaining issues for policy makers to consider are the risks presented by the expanding business activities of banks in the capital and real estate markets, and increasing the participation of SMEs and households in the financial system. JEL Classification: F30, F32, F55, G01, G15, G18, G28, N45 Keywords: Southeast Asia, capital flows, financial crises, financial development, international bond markets
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Bibliographic InfoArticle provided by OECD Publishing in its journal OECD Journal: Financial Market Trends.
Volume (Year): 2010 (2010)
Issue (Month): 2 ()
Find related papers by JEL classification:
- F30 - International Economics - - International Finance - - - General
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
- G01 - Financial Economics - - General - - - Financial Crises
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
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- Ardliansyah, Rifqi, 2012. "Stock Market Integration and International Portfolio Diversification between U.S. and ASEAN Equity Markets," MPRA Paper 41958, University Library of Munich, Germany.
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