References (17)


Citations (6)



Financial Integration in Emerging Asia: Challenges and Prospects

Cyn-Young Park

Asian Development Bank - Economic Research

Jong‐Wha Lee

Korea University

December 2011

Asian Economic Policy Review, Vol. 6, Issue 2, pp. 176-198, 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.

Number of Pages in PDF File: 23

Keywords: Asian financial integration, capital flow volatility, contagion and spillover, convergence of asset return, cross‐border asset holding

JEL Classification: F30, F36, G15, F41

Date posted: December 11, 2011  

Suggested Citation

Park, Cyn-Young and Lee, Jong‐Wha, Financial Integration in Emerging Asia: Challenges and Prospects (December 2011). Asian Economic Policy Review, Vol. 6, Issue 2, pp. 176-198, 2011. Available at SSRN: http://ssrn.com/abstract=1970737 or http://dx.doi.org/10.1111/j.1748-3131.2011.01193.x

Contact Information

Cyn-Young Park (Contact Author)
Asian Development Bank - Economic Research ( email )
6 ADB Avenue, Mandaluyong City 1550
Metro Manila
(632) 632-5473 (Phone)
HOME PAGE: http://www.adb.org
Jong‐Wha Lee
Korea University
Feedback to SSRN

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References:  17
Citations:  6

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