Regionalizing Financial Development in East Asia
The bank-based financial systems of the East Asian economies were a crucial determinant of their rapid development (Amsden, 1989; ÆniŞ, 1991; Wade, 2004). In recent years, however, capital markets in the region have expanded rapidly and governments across the region have implemented a series of reforms to this purpose. More specifically, in the wake of the Asian financial crisis of 1997–98 there have been considerable changes in the domestic financial architectures in a wide range of East and Southeast Asian countries with capital markets becoming increasingly important sources of funds. This chapter looks at these changes and suggests that they have largely been driven by processes of lesson-learning by national and regional actors in response to the Asian crisis. Interestingly, these processes of lesson learning have not only taken place in the four countries most affected by the crisis, Indonesia, Malaysia, South Korea, and Thailand (AFC-4), but also in ‘spectator’ countries such as China and Vietnam that were only indirectly affected by the 1997’98 crisis.
KeywordsGross Domestic Product Capital Market Bond Market Asian Development Bank Stock Market Capitalization
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