Financial Integration in Emerging Asia: Challenges and Prospects
Park, Cyn-Young | December 2011
Using both quantity- and price-based measures of financial integration, the paper shows an increasing degree of financial openness and integration in emerging Asia. Assessing the impact of a regional shock relative to a global shock on local equity and bond markets, the findings suggest that the region's equity markets are integrated more globally than regionally, although the degrees of both regional and global integration have increased significantly since the 1997/1998 Asian financial crisis. However, emerging Asia's local currency bond markets remain generally segmented, being neither regionally nor globally integrated. There are potential benefits from increased regional integration of financial markets. Financial integration at the regional level allows for the region's economies to benefit from allocation efficiency and risk diversification. Policymakers in the region must strike the right balance between maximizing the net benefits from regional and global financial openness, and minimizing the potential costs of financial contagion and crisis.
CitationPark, Cyn-Young. 2011. Financial Integration in Emerging Asia: Challenges and Prospects. © Wiley. http://hdl.handle.net/11540/4267.
Financial Management System
Capital Market Development
International Financial Market
Multilateral Financial Institutions
Multilateral development banks