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Asian Financial Integration; Trends and Interruptions


  • Eduardo Borensztein
  • Prakash Loungani


The paper compares trends in financial integration within Asia with those in industrialized countries and other regional groups. Declines in cross-country dispersion in equity returns and interest rates suggest increased Asian integration, with the process interrupted by crises and global volatility. Cross-border equity and bond holdings have also increased, but Asian countries remain considerably more financially integrated with major countries outside the region than with those within the region. The paper also discusses whether potential benefits of regional financial integration, such as increased risk-sharing and stability of the investor base, have materialized.

Suggested Citation

  • Eduardo Borensztein & Prakash Loungani, 2011. "Asian Financial Integration; Trends and Interruptions," IMF Working Papers 11/4, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:11/4

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    Cited by:

    1. Linh Bun & Nirvikar Singh, 2016. "Heterogeneous Patterns of Financial Development: Implications for Asian Financial Integration," International Economic Journal, Taylor & Francis Journals, vol. 30(2), pages 243-271, June.
    2. Didier, Tatiana & Llovet, Ruth & Schmukler, Sergio L., 2017. "International financial integration of East Asia and Pacific," Journal of the Japanese and International Economies, Elsevier, vol. 44(C), pages 52-66.
    3. Phurichai Rungcharoenkitkul, 2011. "Risk Sharing and Financial Contagion in Asia; An Asset Price Perspective," IMF Working Papers 11/242, International Monetary Fund.
    4. repec:ebl:ecbull:eb-17-00557 is not listed on IDEAS
    5. repec:lje:journl:v:22:y:2017:i:sp:p:135-152 is not listed on IDEAS
    6. Caporale, Guglielmo Maria & Menla Ali, Faek & Spagnolo, Nicola, 2015. "Exchange rate uncertainty and international portfolio flows: A multivariate GARCH-in-mean approach," Journal of International Money and Finance, Elsevier, vol. 54(C), pages 70-92.


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