Asean urged to accelerate integration of bank system

MANILA, Philippines - The Association of Southeast Asian Nations (Asean) should accelerate the integration of its banking systems and financial markets to better withstand external shocks, the region’s finance ministers   said yesterday.

 â€œWe need to accelerate the financial integration in the region… our ability to withstand situations such as (the US Federal Reserve’s) tapering will also be improved,” Finance Secretary Cesar V. Purisima said at the 10th Asean Finance Ministers’ Investor Seminar in Makati City.

Purisima said that an integrated banking system will better facilitate the flow of investments within the region. 

At the same time,Purisima said the combined current accounts surplus and the total level of international reserves held by the Asean will shield the region from external crises especially those arising from liquidity shocks.

 â€œThere is a major opportunity in integrating the Asean… but there still exists a gap in standards, skills, and governance so there will be a need to address these,” Purisima said.

Asean plans to build an integrated economic community by next year. Under this is the financial integration, which includes the banking integration framework eyed for implementation before 2020.

Bambang Brodjonegoro, Indonesia’s Vice Minister of Finance, for his part stressed that ASEAN members have already strengthened their economies since the Asian Financial Crisis of 1998.

 â€œI believe the Asean has the capacity to deal with crisis that will come in time. Looking at 1998, and especially after (the global financial crisis of) 2008, I believe Asean now has some resilience to deal,” he said.

This is due to the nations’ macroeconomic stability built through the years, and such is expected to be sustained in the future, he continued.

Despite the different stages of economic development in the region, Josephine Teo, Singapore’s Senior Minister of State, Ministry of Finance and Ministry of Transport, said that as a whole, Asean will attract more foreign direct investments.

 â€œIt is fair to say that FDI flows to the region have been due to the macroeconomic stability and that has boosted investor confidence,” Teo said.