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Regional Monitoring of Capital Flows and Coordination of Financial Regulation : Stakes and Options for Asia

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  • Michael G. Plummer

    (Asian Development Bank Institute)

Abstract

The ongoing global economic crisis has punished Asian economies severely, despite the fact that its origins derive from outside the region. The global economic crisis was transmitted through real and financial channels, underscoring how vulnerable the region is to external shocks. This paper explores the microeconomic origins of the financial crisis and endeavors to ascertain how crises might be mitigated in the future through better regulation, supervision, and institution-building. Moreover, it makes the case for closer economic cooperation in order to internalize key externalities associated with modern global finance. This cooperation, in turn, should take place at the appropriate level, with incentives for cooperation at the global, regional, and subregional levels. It explores the potential for the creation of an Asian Financial Stability Board and deepening other initiatives in Association of Southeast Asian Nations (ASEAN)+3 and ASEAN forums. However, it stresses that the most important financial reforms in Asia will need to take place at the national level.

Suggested Citation

  • Michael G. Plummer, 2010. "Regional Monitoring of Capital Flows and Coordination of Financial Regulation : Stakes and Options for Asia," Finance Working Papers 22017, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:financ:22017
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    1. repec:fip:fedgsq:y:2005:i:mar10 is not listed on IDEAS
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    Cited by:

    1. Morgan, Peter J. & Lamberte , Mario, 2012. "Strengthening Financial Infrastructure," ADBI Working Papers 345, Asian Development Bank Institute.
    2. Ulrich Volz, 2013. "Lessons of the European crisis for regional monetary and financial integration in East Asia," Asia Europe Journal, Springer, vol. 11(4), pages 355-376, December.
    3. Masahiro Kawai & Peter J. Morgan, 2014. "Regional financial regulation in Asia," Chapters, in: Masahiro Kawai & Peter J. Morgan & Pradumna B. Rana (ed.), New Global Economic Architecture, chapter 6, pages 112-147, Edward Elgar Publishing.
    4. Catherine Figuière & Laëtitia Guilhot, 2011. "Évolution du rôle du yuan en Asie orientale : la guerre des monnaies aura-t-elle lieu ?," Post-Print halshs-00697581, HAL.
    5. Catherine Figuière & Laëtitia Guilhot & Cyriac Guillaumin, 2013. "La question du régime de change en Asie de l'Est : Vers un bloc monétaire régional ?," Revue d'économie politique, Dalloz, vol. 123(2), pages 265-298.

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    More about this item

    Keywords

    global financial crisis; Asia; microeconomics; financial regulation; financial externalities;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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