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Financial Systems in Asia Pacific
Towards Integration
9 May 2013
AICD Singapore ConferenceShangri-La Hotel, Singapore
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Dr Philip Lowe: China Australian Financial relationship
• As trade linkages increase, firms require an increasing array of financial services
• Financial architecture… is incrementally, but inexorably, being put in place
• Still a lot to be done …
Source: Address to Australian Chamber of Commerce in Shanghai 24 April 2013
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Governor Glenn Stevens: Asia Pacific Financial Markets
• Growth in … capital markets is surely likely
• Real wealth (and human capital) growing
• “Financial deepening” has a long way to go
Task … not so much promote growth … as to shape growth
What kind of financial system do we want to see in the region?
Source: Remarks to Asia-Pacific Financial Market Development Symposium. Sydney 10 April 2013
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Financial systems can be a development agent:
• Grow real economies in region
• Benefit people of region and business – a virtuous circle
A regional voice is desirable
AICD and business should demand this from policy makers and regulators
Some Propositions
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Asian Financial Crisis97-98
Global Financial Crisis2008-11?
EuroZone Financial Crisis2012….??
What have we got at the moment?
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“Global Imbalances” 1
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Global imbalances 2
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Governor Stevens:“Why not deploy the regions own
savings at home, for higher returns”
Big Question
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A “Well Developed” Financial System
Maturity transformation
Intertemporal adjustment
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APEC Economies – Financial Systems
Well developed, not balancedUnder developed
Well developed, balanced
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For what purposes?
Financial InclusionOne billion without bank accountsSME financeMeet the needs of people and business
RupiahDong $$
$$
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For what purposes?
Connect economies and institutionsRMB and Rupee internationalisationCapital marketsFinance trade and investments
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For what purposes?
Transformation Institutions to marshal long term savings• Health• Welfare and pensions• Infrastructure
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What is the “Financial Architecture”? 1
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“North Atlantic” structures
“North Atlantic” priorities
• Regulation
• Fiscal constraints
What is the “Financial Architecture”? 2
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ASEAN• ASEAN + 3• East Asia Summit
What Regional Architecture? 1
• Asian Bond Markets• Chiang Mai
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APEC• Regional Funds Passport• Asia Pacific Financial Forum?
What Regional Architecture? 2
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Business wants financial systems that are:• Sound• Efficient• Integrated
Region has unique challenges
Inaction will stunt growth
Regional voice desirable
A Regional Voice?
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APFF• Business / APEC Finance Ministers• New “financial architecture”• A structure, not a list of issues
ASEAN and APEC• Best models for region
Asia Pacific Financial Forum
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