Table of Contents

Global Shock, Risks, and Asian Financial Reform

Global Shock, Risks, and Asian Financial Reform

Edited by Iwan J. Azis and Hyun S. Shin

The growth of financial markets has clearly outpaced the development of financial market regulations. With growing complexity in the world of finance and the resultant higher frequency of financial crises, all eyes have shifted toward the current inadequacy of financial regulation. This book expertly examines what this episode means for Asia’s financial sector and its stability, and what the implications will be for the region’s financial regulation. By focusing on legal and institutional frameworks the book also elaborates on various issues and challenges in terms of how financial liberalization can maximize the benefits and minimize the risks of crisis.

Introduction

Fariborz Moshirian

Subjects: economics and finance, asian economics, financial economics and regulation, money and banking

Extract

Over the past 20 years, financial systems in East Asia have undergone a seismic period of liberalization, crisis and development (Liu et al. 2013). In the 1990s, prior to the Asian financial crisis of 1997–98, the emerging economies of East Asia rapidly liberalized their financial systems, aiming to integrate into the global financial system in order to support their continued development. This period of rapid liberalization ended with the Japanese and Asian financial crises of the 1990s. In the wake of the AFC, East Asian economies focused on reforming financial regulation, on building foreign exchange reserves, and on a range of regional initiatives to support regional financial stability, integration and development, all with the overall objective of enhancing economic growth in the region. As a result of a decade of domestic and regional financial sector reform, East Asian economies faced the global financial crisis of 2008 and the Eurozone debt crisis of 2010 with well-regulated and robust financial systems. Nonetheless, while generally resilient, economies in East Asia have suffered some impact from these crises in terms of both trade and availability of finance.