Going Regional: How to Deepen ASEAN’s Financial Markets

53 Pages Posted: 3 Apr 2012

See all articles by Maria Socorro Gochoco‐Bautista

Maria Socorro Gochoco‐Bautista

University of the Philippines, School of Economics

Eli M. Remolona

Bank for International Settlements (BIS) - Monetary and Economic Department

Date Written: January 2012

Abstract

This study identifies the key issues involved in the further development and deepening of financial markets in the Association of Southeast Asian Nations (ASEAN). For the smaller ASEAN countries, the first priority is the development of the banking system. In the larger ASEAN 3 economies, banking systems are already reasonably well-developed, while stock markets and government bond markets have evidently achieved critical mass even while remaining purely domestic markets. The tug-of-war between the geography of information in the direction of more localized markets versus the critical mass required by network externalities makes the case for regional integration stronger for corporate bond markets than for other financial markets. The study proposes three bold initiatives to develop a deep and liquid regional corporate bond market.

Keywords: asean, capital controls, capital flows, cross border capital flows, capital markets, international capital, regional cooperation, financial markets, financial market development, financial systems, bonds, bond markets, corporate bonds, banking systems

JEL Classification: E42, E44, E63, E65, F33, G15

Suggested Citation

Gochoco-Bautista, Maria Socorro and Remolona, Eli M., Going Regional: How to Deepen ASEAN’s Financial Markets (January 2012). Asian Development Bank Economics Working Paper Series No. 300. Available at SSRN: https://ssrn.com/abstract=2032824 or http://dx.doi.org/10.2139/ssrn.2032824

Maria Socorro Gochoco-Bautista (Contact Author)

University of the Philippines, School of Economics ( email )

Quezon City, Diliman
Philippines

Eli M. Remolona

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

IFC 2 Bldg, 78/F
Central
Hong Kong
Hong Kong
+852 2982 7150 (Phone)
+852 2982 7123 (Fax)

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