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The Financial Crisis: A Wake-Up Call for Strengthening Regional Monitoring of Financial Markets and Regional Coordination of Financial Sector Policies?

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  • Adalbert Winkler

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Abstract

How much can regional monitoring of financial markets and coordination of financial sector policies contribute to preventing and mitigating financial crises? This paper reviews and compares the experiences of Europe and Asia, which have taken different routes and have achieved different levels of regional financial integration. The analysis suggests that the harmonization and coordination of regulation and supervision, with a strong focus on maturity and currency mismatch problems, would constitute an important step toward mitigating the risk of crisis. However, regional monitoring and coordination will remain difficult as long as lender-of-last-resort activities and fiscal support packages are organized on a national level. Against this background, the crisis is a wake-up call for further progress on monetary integration in Asia along the lines of the reformed Chiang Mai Initiative. In Europe, the crisis reveals the need to establish a sustainable regulatory and supervisory structure that properly defines and reflects the responsibilities of regional and national authorities in crisis management, including its fiscal dimension. [ADBI Working Paper 199]

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Date of creation: Oct 2010
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Handle: RePEc:ess:wpaper:id:3021
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Keywords: monitoring; financial markets; coordination; maturity; currency; responsibilities; national;

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Find related papers by JEL classification:
  • F15 - International Economics - - Trade - - - Economic Integration
  • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
  • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
  • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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Cited by:

  1. 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.
  2. Masahiro Kawai & Peter J. Morgan, 2014. "Regional Financial Regulation in Asia," Governance Working Papers 23971, East Asian Bureau of Economic Research.
  3. Stavarek, Daniel & Repkova, Iveta & Gajdosova, Katarina, 2011. "Theory of financial integration and achievements in the European Union," MPRA Paper 34393, University Library of Munich, Germany.
  4. Hong Bum Jang, 2011. "Financial Integration and Cooperation in East Asia: Assessment of Recent Developments and Their Implications," IMES Discussion Paper Series 11-E-05, Institute for Monetary and Economic Studies, Bank of Japan.

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