Responding to the Global Financial and Economic Crisis: Meeting the Challenges in Asia

ADB Working Paper Series on Regional Economic Integration No. 60

95 Pages Posted: 31 Oct 2010

See all articles by L Schou-Zibell

L Schou-Zibell

Asian Development Bank

Douglas W. Arner

The University of Hong Kong - Faculty of Law

Date Written: October 30, 2010

Abstract

The global financial and economic crisis marks an important turning point for finance and the Asian growth model. Regional consensus is now supporting economic rebalancing away from the dominant focus on exports to developed markets and towards more a more balanced economic structure supported by domestic and regional financial development. In relation to finance, the crisis highlights the necessity of addressing a range of issues across the region. First, Asian approaches to financial liberalization, prudential regulation, and financial innovation are likely to be closely considered around the world. At the same time, while the region has not been at the center of the global crisis - in contrast to the Asian financial crisis of 1997/98 - it nonetheless provides an important opportunity to strengthen domestic and regional financial regulation. Second, beyond the post-crisis issues, and the prevention of systemic risk in particular, finance must continue to play a central role in supporting economic development and poverty reduction across the region. While the global crisis has highlighted once again the risks of finance, a central objective across Asia must be financial sector development to support economic growth and development. Third, in addition to domestic reform, the crisis provides an opportunity to enhance the international financial architecture, not only to improve its efficacy, but also to enhance the role of empowered Asian economies in global fora and institutions. At the same time, weaknesses in the international financial architecture suggest the need for Asian regional alternatives to address liquidity, liberalization, regulation, and exchange rate volatility.

Keywords: Global Financial Crisis, Group of 20, Systemic Risk, Financial Sector Development

JEL Classification: G01, G15, G17, G18, G24, G28, G32, G33, G34, G35, G38

Suggested Citation

Schou-Zibell, Lotte and Arner, Douglas W., Responding to the Global Financial and Economic Crisis: Meeting the Challenges in Asia (October 30, 2010). ADB Working Paper Series on Regional Economic Integration No. 60. Available at SSRN: https://ssrn.com/abstract=1700402 or http://dx.doi.org/10.2139/ssrn.1700402

Lotte Schou-Zibell

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Douglas W. Arner (Contact Author)

The University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

HOME PAGE: http://hub.hku.hk/rp/rp01237

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