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Tuesday October 20, 2009

Zeti: Vital for Asia to deepen financial integration


It would enable better matching of savings and investment in the region

KUALA LUMPUR: An important strategy for Asia going forward beyond the global crisis is to further strengthen financial integration within the region, says Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz.

“A more integrated regional financial system would enable better matching of savings and investment in the region, allowing for Asia’s large pool of savings to be channelled into productive uses within the region,” she said yesterday at the Asia-Europe Meeting conference on Beyond the Global Crisis: A New Asian Growth Model?

Zeti said while several initiatives had already been taken to advance financial integration, deepening further financial integration in the region required further efforts in the following areas: financial sector liberalisation, capital account liberalisation, the development of regional payment and settlement systems and greater cooperation among the regional regulators and central banks.

“In pursuing these priorities, consideration must, however, be given to the diversity of the various economies within the Asian region,” she said.

In addition, Zeti said the various policies and reforms that were needed must be sequenced and aligned to the heterogeneities of the various economies to ensure such reforms would not lead to disruption and financial instability.

“Deeper financial integration within Asia will also facilitate advancing the strategic positioning of the region in the global financial landscape.

“Asia now has an increased voice in international financial reforms and the setting of international standards,” she said.

This, she said, was a positive development and presented the opportunity for emerging economies, such as in Asia, to participate in the process.

“It is hoped that in so doing, more balanced and inclusive solutions would be derived to contribute positively towards greater global financial stability,” she said.

She also said in order to participate effectively in this new phase of globalisation, previous strategies that brought success needed to be changed.

“This will involve the need to strengthen further domestic demand in the Asian economies supported by greater regional economic and financial integration that is reinforced with enhanced regional cooperation.

“As these trends become more pronounced, it will not only contribute towards unlocking Asia’s full potential, but will also contribute towards a more balanced global growth,” she said.


For Bank Negara statements click here

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