Problems and Prospects of ASEAN Financial Cooperation

  • S. Y. Lee
  • Y. C. Jao


The financial structure of a country is inherently related to its economic structure, and financial development and economic development go hand-in-hand, interacting in mutual causation and effect. Among the ASEAN countries, Indonesia, Malaysia, the Philippines and Thailand are primary producing countries, whilst Singapore is a small manufacturing-trading economy and an open international port. Because of differences in general characteristics and in historical development, problems of banking and finance in the ASEAN countries are somewhat different, showing some special features.


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Notes and References

  1. 9.
    See for example, J. G. Gurley and E. S. Shaw, ‘Financial Aspects of Economic Development’, American Economic Review, September 1955; E. S. Shaw, Financial Deepening in Economic Development (New York: Oxford University Press, 1973);Google Scholar
  2. R. W. Goldsmith, Financial Structure and Development (New Haven: Yale University Press, 1969);Google Scholar
  3. Ronald I. McKinnon, Money and Capital in Economic Development (Washington: Brookings Institution, 1973);Google Scholar
  4. and Don Patinkin, Money, Interest and Prices (New York: Harper & Row, 1965) (2nd edition);Google Scholar
  5. Milton Friedman, The Optimum Quantity of Money and Other Essays (Chicago: Aldine Publishing Company, 1970). Don Patinkin focuses on the ‘real balance effect’ and Milton Friedman regards money as a ‘luxury goods’.Google Scholar
  6. 11.
    Alfred Marshall believed that people held cash balance not only against their income but also against their wealth. See Note 40 in Chapter 7. J. M. Keynes postulates the ‘finance motive’ of holding money, i.e. people accumulate cash balance during the interval between borrowing and investment expenditure. See J. M. Keynes, ‘Alternative Theories of the Rates of Interest’, Economic Journal, Vol. XLVII, 1937, pp. 246–7.Google Scholar
  7. 12.
    See Census of Services, 1974, Vol. II (Singapore: Department of Statistics, October 1977), p. 55; and Lee Sheng-Yi, ‘The Role of Financial Institutions in the Singapore Economy’, in Banking and Finance Supplement of the Business Times, Singapore, 24 February 1978.Google Scholar
  8. 14.
    FIR is the ratio of all financial assets to national wealth. See R. Goldsmith, Financial Structure and Development (New Haven: Yale University Press, 1969).Google Scholar
  9. 15.
    See the Workshop Paper and Summary ‘Co-operation in ASEAN Banking Operation and Development’, in the Second ASEAN Banking Conference on 25–8 January 1978.Google Scholar

Copyright information

© S.Y. Lee and Y.C. Jao 1982

Authors and Affiliations

  • S. Y. Lee
    • 1
  • Y. C. Jao
    • 2
  1. 1.National University of SingaporeSingapore
  2. 2.University of Hong KongChina

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