Asian Financial Integration: Trends and Interruptions

By Eduardo Borensztein, Prakash Loungani

January 1, 2011

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Eduardo Borensztein, and Prakash Loungani. Asian Financial Integration: Trends and Interruptions, (USA: International Monetary Fund, 2011) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper compares trends in financial integration within Asia with those in industrialized countries and other regional groups. Declines in cross-country dispersion in equity returns and interest rates suggest increased Asian integration, with the process interrupted by crises and global volatility. Cross-border equity and bond holdings have also increased, but Asian countries remain considerably more financially integrated with major countries outside the region than with those within the region. The paper also discusses whether potential benefits of regional financial integration, such as increased risk-sharing and stability of the investor base, have materialized.

Subject: Financial crises, Financial institutions, Financial integration, Financial markets, Securities, Stock markets, Stocks

Keywords: Asia, Asia and Pacific, Bond markets, Eastern Europe, Equity holdings equation, Equity premium, Europe, Exchange rate, Financial crisis, Financial integration, Global, Gravity model, Herding, Home bias, Investor base, Investor economy, Investors' choice, Issuer economy Group, Risk sharing, Risk-sharing, Securities, Stock markets, Stocks, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/004
Stock No:

WPIEA2011004
ISBN:

9781455211821
ISSN:

1018-5941

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