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Why Has There Been Less Financial Integration In Asia Than In Europe?


  • Eichengreen, Barry
  • Park, Yung Chul


This paper inquires into the causes of the contrasting experiences between Asia and Europe and asks what they bode for the future. It poses questions like: Is the contrast explicable in terms of the fact that Europe was earlier to begin the process of removing controls on cross-border portfolio capital flows? Is it explicable by the fact that Europe had better developed financial markets at the start of its regional monetary and financial integration project? Is the main difference deeper trade and factor market integration due to Europe’s Single Market project, compared to more partial and tentative moves toward regional trade integration in Asia? Or does the euro make a key difference through the elimination of exchange risk?

Suggested Citation

  • Eichengreen, Barry & Park, Yung Chul, 2003. "Why Has There Been Less Financial Integration In Asia Than In Europe?," Institute of European Studies, Working Paper Series qt6823v94w, Institute of European Studies, UC Berkeley.
  • Handle: RePEc:cdl:bineur:qt6823v94w

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    References listed on IDEAS

    1. Beetsma, Roel M. W. J. & Lans Bovenberg, A., 1998. "Monetary union without fiscal coordination may discipline policymakers," Journal of International Economics, Elsevier, vol. 45(2), pages 239-258, August.
    2. Buiter, Willem H. & Grafe, Clemens, 2002. "Patching up the Pact: some Suggestions for Enhancing Fiscal Sustainability and Macroeconomic Stability in an Enlarged European Union," CEPR Discussion Papers 3496, C.E.P.R. Discussion Papers.
    3. Buti, Marco & Eijffinger, Sylvester C.W. & Franco, Daniele, 2003. "Revisiting the stability and growth pact: grand design or internal adjustment?," Seminarios y Conferencias 6567, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. von Hagen, Jurgen & Harden, Ian J., 1995. "Budget processes and commitment to fiscal discipline," European Economic Review, Elsevier, vol. 39(3-4), pages 771-779, April.
    5. Barry Eichengreen & Ricardo Hausmann & Jürgen Von Hagen, 1999. "Reforming Budgetary Institutions in Latin America: The Case for a National Fiscal Council," Open Economies Review, Springer, vol. 10(4), pages 415-442, October.
    6. Uhlig, H.F.H.V.S., 2002. "One Money, But Many Fiscal Policies in Europe : What are the Consequences?," Discussion Paper 2002-32, Tilburg University, Center for Economic Research.
    7. Dixit, Avinash & Lambertini, Luisa, 2003. "Symbiosis of monetary and fiscal policies in a monetary union," Journal of International Economics, Elsevier, vol. 60(2), pages 235-247, August.
    8. Wren-Lewis, Simon, 2000. "The Limits to Discretionary Fiscal Stabilization Policy," Oxford Review of Economic Policy, Oxford University Press, vol. 16(4), pages 92-105, Winter.
    9. Barry Eichengreen & Charles Wyplosz, 1998. "The Stability Pact: more than a minor nuisance?," Economic Policy, CEPR;CES;MSH, vol. 13(26), pages 65-113, April.
    10. Marco BUTI & Daniele FRANCO & Hedwig ONGENA, 1997. "Budgeetary Policies during Recessions : Retrospective Application of the Stability and Growth Pact” to the Post-War Period," Discussion Papers (REL - Recherches Economiques de Louvain) 1997041, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    11. Coricelli, Fabrizio & Ercolani, Valerio, 2002. "Cyclical and Structural Deficits on the Road to Accession: Fiscal Rules for an Enlarged European Union," CEPR Discussion Papers 3672, C.E.P.R. Discussion Papers.
    12. Gleich, Holger, 2003. "Budget institutions and fiscal performance in Central and Eastern European countries," Working Paper Series 215, European Central Bank.
    13. von Hagen, Jürgen, 1998. "Budgeting institutions for aggregate fiscal discipline," ZEI Working Papers B 01-1998, University of Bonn, ZEI - Center for European Integration Studies.
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    Cited by:

    1. Adalbert Winkler, 2012. "The Financial Crisis: A Wake-up Call for Strengthening Regional Monitoring of Financial Markets and Regional Coordination of Financial Sector Policies?," Chapters,in: Implications of the Global Financial Crisis for Financial Reform and Regulation in Asia, chapter 7 Edward Elgar Publishing.
    2. Philip R. Lane & Sergio L. Schmukler, 2006. "The international financial integration of China and India," Proceedings, Federal Reserve Bank of San Francisco, issue Jun.
    3. Barry Eichengreen & Pipat Luengnaruemitchai, 2008. "Bond Markets as Conduits for Capital Flows: How Does Asia Compare?," NBER Chapters,in: International Financial Issues in the Pacific Rim: Global Imbalances, Financial Liberalization, and Exchange Rate Policy (NBER-EASE Volume 17), pages 267-313 National Bureau of Economic Research, Inc.
    4. L. Alan Winters & Shahid Yusuf, 2007. "Dancing with the Giants: China, India, and the Global Economy," World Bank Publications, The World Bank, number 6632.
    5. Woosik Moon & Yeongseop Rhee, 2012. "Asian Monetary Integration," Books, Edward Elgar Publishing, number 14191.
    6. Park,Haelim & Ruiz Ortega,Claudia & Tressel,Thierry, 2015. "Determinants of long-term versus short-term bank credit in EU countries," Policy Research Working Paper Series 7436, The World Bank.
    7. Hiroshi Fujiki & Akiko Terada-Hagiwara, 2007. "Financial Integration in East Asia," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 25(S1), pages 57-100, December.
    8. Aerdt Houben & Iskander Schrijvers & Tim Willems, 2008. "The Supervision of Banks in Europe: The Case for a Tailor-made Set-up," DNB Occasional Studies 604, Netherlands Central Bank, Research Department.
    9. Cavoli, Tony, 2012. "Exploring dimensions of regional economic integration in East Asia: More than the sum of its parts?," Journal of Asian Economics, Elsevier, vol. 23(6), pages 643-653.
    10. Ramkishen S. Rajan & Reza Y. Siregar & Tony Cavoli, 2006. "Financial Integration in East Asia: How Far? How Much Further to Go?," Working Papers id:372, eSocialSciences.
    11. Daniel Leigh & Abdul d Abiad & Ashoka Mody, 2007. "International Finance and Income Convergence; Europe is Different," IMF Working Papers 07/64, International Monetary Fund.

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    comparative; economy; euro; finance; integration; PEIF;


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