Capital Market Reform in Asia contains a selection of papers that capture the essence of capital market reform in the Asian region, including important lessons from the global financial crisis of 2007–2009. It points to the need for Asian economies to adapt their capital market development strategies to rebalance growth by increasing mobilization of Asian savings for Asian investment.
Capital Market Reform in Asia is derived from 11 round table conferences on Capital Market Reform in Asia, jointly organized by Asian Development Bank Institute (ADBI) and the Organization for Economic Co-operation and Development (OECD).
The volume charts the progress of capital market development in Asia after the 1997–1998 Asian financial crisis, providing insights into capital market reform and the new challenges that have arisen since the global financial crisis of 2007–2009, amidst reforms to the international financial architecture.
Chapter 10: Restoring Trust in Financial Markets*
Restoring Trust in Financial Markets*
The task, we are told, is to restore trust in financial markets after the damage done by Enron and its cohorts, the “tech bubble,” and earlier by the Asian crisis. Confucius said that a ruler needs three things—weapons, food, and trust; if he has to give up any of these, weapons go first, then food. “Without trust we cannot stand” (quoted in O'Neil, 2002). But how do we strengthen trust? We are now in the phase of the economic cycle when we hear increasingly strident cries that “the government ought to do something about it.” So there will be pressures to re-write, formalize, strengthen, and centralize the rules of prudential supervision, governance, and corporate behavior, making ...