Seek Greater Financial Integration, Says Central Bank Gov

KUALA LUMPUR, Nov 1 (Bernama) -- There's a need to promote greater regional financial integration through increased cross-border banking and financial activities within the region, said Bank Negara Malaysia (Malaysia's Central Bank) Governor Dr Zeti Akhtar Aziz. She said financial institutions in Asia were increasingly turning their focus to strengthening their regional presence taking advantage of Asia's enormous growth prospects. Malaysian banks, for example, operate in 13 countries across Asia, with total foreign assets expanding from only US$1 billion to more than US$100 billion between 2002 and 2010, she added. "Our payment and settlement systems are also being linked to facilitate more cost-effective cross-border and efficient investment flows. "Efforts are currently underway to establish a Pan-Asian Central Securities Depository Alliance which will provide seamless accessibility to Asian securities by international investors," she said in her keynote address at the "First Asian Central Bank's Watchers Conference", here on Tuesday. Zeti said the acceleration of regional financial integration in Asia was contributing to the more effective intermediation of funds from the region to be channelled towards meeting the investment requirements of the region. She said over the next decade, Asia's projected infrastructure development expenditure alone would be twice the estimated savings within the region. "This provides investors with new investment horizons and significant diversification opportunities," she added. Taking lessons from the sovereign debt crisis in Europe, Zeti said there was a need to put in place elements that would facilitate the deepening of trade and investment linkages within Asia while alsocollectively working towards strengthening Asia's resilience and stability. She said Asia's economic transformation, comprehensive financial sector reforms and fiscal prudence have provided important support to Asia's resilience and ability to withstand the destabilising spill-over effects of the current ongoing global financial and economic crisis. "In addition, the regional surveillance mechanism are being reinforced by financial support facilities and an integrated framework for crisis resolution," she added. -- BERNAMA