ADB urges steps to secure Asian markets from turmoilSeptember 18th, 2008 - 3:16 pm ICT by IANS
Manila, Sep 18 (Xinhua) The Asian Development Bank (ADB) Thursday suggested setting up of a mechanism with an early warning system to help protect Asian markets from global financial turmoil. “The most recent bout of global financial market turmoil illustrates the urgent need for central banks and regulators to build a cogent and pro-active plan to better preserve regional financial stability,” ADB chief Haruhiko Kuroda said here.
A new wave of financial crisis was set in motion Monday when Lehman Brothers Holdings Inc, the fourth largest US investment bank, filed for bankruptcy protection, knocking Asian banking stocks and prompting central banks to pump billions into the money markets.
“It’s now time for Asia to move forward on its path toward greater financial integration and to develop the foundations for regional financial stability,” Kuroda said.
The proposed “Asian Financial Stability Dialogue”, which would include finance ministries and central bank officials, financial regulators and supervisors, and market participants, could use early warning systems and other mechanisms to improve surveillance of the region’s financial markets, Kuroda said.
Asian financial markets and economies have so far weathered the current global financial storm relatively well, “but we cannot take this for granted”, he added.
Several asset markets, particularly real estate, are potentialy vulnerable to shocks.
“Our region requires deeper and more innovative financial markets. Bank finance and equity markets still dominate Asia. Debt markets are the next stage and we have seen progress,” Kuroda said.
Asia needs to promote consistent standards, harmonize indicators, and establish standards for governance and transparency to facilitate domestic and international investment, he added.
Financial integration in the region has lagged despite the rapid growth in regional trade. Asia is still dependent on more mature markets in Europe and North America to intermediate its large savings than doing it through its own markets, according to ADB.
Tags: asian development bank, asian financial markets, central bank officials, early warning system, early warning systems, global financial turmoil, haruhiko kuroda, lehman brothers holdings, lehman brothers holdings inc, market turmoil