Table of Contents

A New Financial Market Structure for East Asia

A New Financial Market Structure for East Asia

Edited by Yung Chul Park, Takatoshi Ito and Yunjong Wang

This book contends that the East Asian financial constitution lacks an appropriate infrastructure, resulting in inefficient allocation of high savings and an over-inflated short-term debt market. It goes on to point out that despite high savings, East Asia’s dependency on financial centers outside the region is also relatively high, and that there is no strong region-wide network to connect various financial centers in East Asia.

Chapter 9: Recycling Asian Savings within the Region: The Role of Singapore

Ngiam Kee Jin

Subjects: asian studies, asian economics, economics and finance, asian economics, financial economics and regulation


Ngiam Kee Jin 1. INTRODUCTION A source as well as a sink for internationally mobile capital, Singapore has successfully created a financial hub within the Asian region wherein efficient, well regulated capital markets co-exist with adequately capitalized and financially sound banking groups.1 The country can boast of an established and well-oiled market infrastructure within which market makers, clearing systems, settlement procedures and knowledgeable investors set high standards for the region and beyond. A liberalized financial system which provides easy access to foreign investors as well as issuers results in a cosmopolitan business environment. The freedom for foreigners to invest here is evidenced by the fact that 92 per cent of the non-Singapore dollar debt issued in the offshore market is held by foreigners. Foreign firms and professionals are welcomed into the country. Firms originating in nations across the globe operate in this island nation. The importance of the country to their activities is underscored by the fact that of the 6000 foreign companies presently in Singapore, 60 per cent use the country as their Asian headquarters.2 Active and effective governmental participation and encouragement with regards to the development of domestic capital markets as well as networks with markets and economies regionally and globally create a unique financial center that can function as a springboard to developed markets of the West. Singapore is blessed with an unassailable record of political and financial stability and low corruption. This combined with the Monetary Authority of Singapore’s (MAS) commitment to adequate...

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