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Asian Financial Integration: Trends and Interruptions
Author:
Mr. Eduardo Borensztein
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Mr. Prakash Loungani
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Series:
IMF Working Papers
Volume/Issue:
Volume 2011: Issue 004
Language:
English
Publication Date:
01 Jan 2011
DOI:
https://doi.org/10.5089/9781455211821.001
ISBN:
9781455211821
ISSN:
1018-5941
Pages:
41
Keywords:
WP; investor economy; financial crisis; exchange rate; home bias; financial integration; Asia; equity premium; bond markets; gravity model; risk-sharing; herding; issuer economy Group; equity holdings equation; investors' choice; investor base; risk sharing; Stocks; Stock markets; Securities; Asia and Pacific; Eastern Europe; Global; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund