ADB urges coordination among Asia's regulators amid financial turmoil
18/9/2008 17:48
Asian Development Bank (ADB) President Haruhiko Kuroda today proposed
establishing an "Asian Financial Stability Dialogue" to coordinate regulatory
development and monitor potential vulnerabilities in the region's markets and
financial systems.
The most recent bout of global financial market turmoil
illustrates the urgent need for central banks and regulators to build a cogent
and pro-active plan to better preserve regional financial stability, Kuroda said
at the ADB headquarters in Manila.
A new wave of financial tsunami triggered
by Lehman Brothers Holdings Inc., the fourth-largest US investment bank which
filed for bankruptcy protection on Monday, has knocked Asian banking stocks and
prompted central banks to pump billions into strained money markets.
"It's
now time for Asia to move forward on its path toward greater financial
integration and to develop the foundations for regional financial stability,"
Kuroda said.
The proposed "Asian Financial Stability Dialogue", which would
include finance ministry and central bank officials, financial regulators and
supervisors, and market participants, could use early warning systems and other
mechanisms to improve surveillance of the region's financial markets, Kuroda
said.
Asian financial markets and economies have so far weathered the current
global financial storm relatively well, "but we cannot take this for granted,"
he added.
Kuroda warned that vulnerabilities and risks to the region's
financial systems remain. Authorities are working hard to contain inflationary
pressures against the risk of slowing economic activity, for example. And
several asset markets, particularly real estate, also show potential
vulnerability to shocks.
"Our region requires deeper and more innovative
financial markets. Bank finance and equity markets still dominate Asia. Debt
markets are the next stage and we have seen progress," Kuroda said.
Asia
needs to promote consistent standards, harmonize prudential indicators, and
establish standards for governance and transparency to facilitate domestic and
international investment, he added.
Financial integration in the region has
lagged despite the rapid growth in regional trade integration. Asia is still
dependent on more mature markets in Europe and North America to intermediate its
large savings than doing it through its own markets, according to
ADB.
Xinhua
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