ASEAN Financial Integration

44 Pages Posted: 26 Mar 2015

See all articles by Geert Almekinders

Geert Almekinders

International Monetary Fund (IMF)

Satoshi Fukuda

Bocconi University - Department of Decision Sciences; Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research

Alexandros Mourmouras

International Monetary Fund (IMF) - Policy Development and Review Department

Jianping Zhou

International Monetary Fund (IMF)

Date Written: February 2015

Abstract

The establishment of the ASEAN Economic Community (AEC) at end-2015 has brought into sharp focus the issue of financial and economic integration in the region. This paper takes stock of ASEAN’s financial integration and prospects. ASEAN integration could accelerate in the years ahead; it will likely be a safe, gradual process consistent with the “ASEAN way” of consensus decision-making. Properly phased and sequenced, closer financial integration has the potential to help increase real incomes and accelerate real convergence within ASEAN and narrow the region’s gap with advanced Asia. Realizing the promise of financial integration will require ASEAN countries to make long-term investments in financial infrastructure. Policymakers can draw on the experience of their more advanced peers and of other regions. Gradualism and safeguards should not be excuses for inaction or financial protectionism. Reliance on flexible policy frameworks and a strengthened and tested regional financial safety net should be part of the agenda. Closer engagement with the Fund could also help.

Keywords: Economic integration, Southeast Asia, Association of Southeast Asian Nations, Economic growth, Trade integration, Trade liberalization, Capital account liberalization, Cross country analysis, ASEAN, Financial integration, capital flows, financial sector liberalization., investment, debt, volatility

JEL Classification: F21, F33

Suggested Citation

Almekinders, Geert and Fukuda, Satoshi and Mourmouras, Alexandros and Zhou, Jianping, ASEAN Financial Integration (February 2015). IMF Working Paper No. 15/34, Available at SSRN: https://ssrn.com/abstract=2585381

Geert Almekinders (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Satoshi Fukuda

Bocconi University - Department of Decision Sciences ( email )

Via Roentgen 1
Milan, 20136
Italy

Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research ( email )

Via Roentgen 1
Milan, 20136
Italy

Alexandros Mourmouras

International Monetary Fund (IMF) - Policy Development and Review Department ( email )

700 19th St. NW
Room 5-311
Washington, DC 20431
United States
202-623-5402 (Phone)
202-589-5402 (Fax)

Jianping Zhou

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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