A New Financial Market Structure for East Asia
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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.
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Chapter 5: How has the European Monetary Integration Process Contributed to Regional Financial Market Integration?

Beate Reszat


5. How has the European monetary integration process contributed to regional financial market integration? Beate Reszat 1. INTRODUCTION European financial market integration has been a stepwise process which is far from completed. Monetary integration has been one important element and driving force in this process, but, as this chapter will demonstrate, not, by far, the only one. Others include the emergence of the euromarkets in the 1950s and 1960s, regional exchange-rate arrangements, individual countries’ financial liberalization efforts and the EU Single Market programme. Beside, not all influences were policy induced. At times, market forces played a decisive role. Experience in Europe has demonstrated that the benefits of financial integration are greater for some countries than for others. There were – and still are – considerable differences between EU member states concerning financial systems, structures and institutions, and the question is on which level adjustment and convergence are taking place. The common assumption implicitly or explicitly made in many regional integration debates is that financial systems adjust to the highest existing standard. But, of course, other scenarios can be imagined as well. An increasing inward orientation in the region may shift the focus from an overall strive for excellence towards winning market share in lesser developed systems, and the need for compromise in the policy dialogue on integration may water down principles of efficiency. The important point here is that the role of monetary integration in different scenarios may differ, too. In eliminating currency risks and...

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