The pace of financial integration in Southeast Asia is “disappointing”, but policymakers are intent on speeding things up, Monetary Authority of Singapore managing director Ravi Menon said on Friday.
“While there are good reasons why financial integration has been slower than trade integration, one cannot help but think that progress could have been faster than what we have seen to-date,” Menon said at the ASEAN (Association of Southeast Asian Nations) banking council meeting, NewsNow reported.
“In that sense, the pace of financial integration is disappointing. ASEAN finance ministers and central bank governors are therefore determined to make up for lost time and press ahead with liberalization in the post-AEC (ASEAN Economic Community) phase leading up to 2020.”
The ASEAN Financial Integration Framework was adopted and endorsed by central bank governors and finance ministers of members of the Association of Southeast Asian Nations in 2011. It chiefly seeks to remove barriers to financial services and capital markets within the region.
Menon said part of the slow integration has been deliberate, because harmonizing regulatory standards and opening access to financial services are inherently more complex than trade integration.
“Unlike the goods market and most services, financial liberalization and integration must pay close heed to issues of systemic stability,” he said.
But more can be done. In terms of banking, data aggregation is a priority.
“For banks with pan-ASEAN operations, the segregation of data and systems in multiple countries due to data on-shoring requirements may hinder effective group risk management and raise data security concerns,” Menon said.
Insurance integration must tackle cross-border access to catastrophe insurance and reinsurance, because the region remains exposed to natural disasters. “As risk exposures grow in scale, size and complexity, they will exceed the capacity of individual states to underwrite the risks confronting their communities and economies,” he said.
In terms of capital markets, the ASEAN trading link between Malaysia, Singapore and Thailand needs to grow. “Establishing clearing, settlement, and custody links will make the ASEAN trading link a full-fledged end-to-end platform across the three ASEAN markets,” he said.
Expel Myanmar
It would be better for Myanmar to be excluded from ASEAN as genocide is unacceptable, said Dr. Mahathir Mohamad.
The former prime minister urged ASEAN as well as the United Nations to take action against Myanmar. “Countries like this only give a bad name to us. So, if you want to commit genocide, leave ASEAN,” he said.
“Myanmar has not responded to requests to be more humane, instead they continue merciless killing of people, and this should not be the case,” he said while delivering his keynote speech at the International Conference themed ‘Plight of the Rohingya, crime against humanity’.
He added that the United Nations should be asked to do something about it.
