A New Financial Market Structure for East Asia
Show Less

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.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 4: Why has there been Less Regional Integration in East Asia than in Europe?

Barry Eichengreen and Yung Chul Park


4. Why has there been less financial integration in Asia than in Europe? Barry Eichengreen and Yung Chul Park 1. INTRODUCTION One of the most striking aspects of Europe’s recent development has been the growth and integration of financial markets. Bond markets have grown explosively since the advent of the euro. Cross-border transactions in government bonds have risen sharply with the emergence of the German bund as a benchmark asset, while the volume of corporate bond issues has grown even more dramatically.1 Securities markets are consolidating around London and Frankfurt, which are competing for the mantle of Europe’s dominant financial center. This rapid market integration has raised questions about the viability of Europe’s traditional model of bank-based financial intermediation, causing commercial and investment banks to respond with a wave of mergers and acquisitions.2 In Asia, in contrast, there has been less progress in financial integration. Cross-border bank credit flows remain becalmed at low levels. There is no sign of the development of an integrated market in government and corporate bonds. Equity markets have not yet begun to consolidate. If anything, the countries of East Asia have developed stronger financial ties with Western Europe and the United States than with one another. This conclusion obtains whether one analyses the distribution of lead manager by nationality, the source of cross-border bank credit flows, or any of a number of other indicators of financial integration (Park and Bae 2002). These contrasts are perhaps not surprising, given that the broader process of integration is...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.