Financial Innovation in East Asia
40 Pages Posted: 27 Sep 2013 Last revised: 12 Nov 2014
Date Written: September 27, 2013
Finance is important for development. However, the Asian financial crisis of 1997-1998 and the global financial crisis of 2008 highlighted the serious risks associated with financial liberalisation and excessive innovation. East Asia’s strong focus on economic growth has necessitated a careful balancing of the benefits of financial liberalisation and innovation against the very real risks inherent in financial sector development. This paper examines this issue, focusing on the role of regulation and legal and institutional infrastructure in both supporting financial development and limiting the risk of financial crises. The paper then addresses a series of issues with particular developmental significance in the region: trade finance, mortgage markets, SME finance, non-bank finance, and mobile financial services.
Suggested Citation: Suggested Citation