Asia recovered well from the 1997 financial crisis and has weathered well the current global crisis. However, across Asia, financial sector development remains an important development agenda. In the wake of the region's emerging role in supporting more balanced and sustainable global growth, further financial development and integration in Asia is now imperative.
Despite the region's spectacular economic performance, its financial stability continues to be beset by bank-dominated local financial systems, anemic legal and regulatory financial infrastructures, and shallow regional financial markets. While progress has been commendable, there is much room for improvement in the region's financial integration.
The region's equity markets are integrated more globally than regionally, and Asia's local currency bond markets remain generally segmented, and separated from the regional and global mainstream. What should be the focus of further development agenda for Asian financial systems? What can we do to ensure a more stable contribution of financial sector development and market integration to the development of Asia?