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 13: The Elephant in the Room: The Need to Deal with What Banks Do*
The Elephant in the Room: The Need to Deal with What Banks Do*
Contagion and counterparty risk are the hallmarks of this crisis.
Contagion risk and counterparty failure have been the main hallmarks of the global financial and economic crisis of 2007–09, making it very different and much more potent than those that preceded it. While some large diversified banks that focused mainly on commercial banking survived very well, financial conglomerates built on investment banking, the structuring of complex derivatives, and proprietary trading as the main drivers of growth, as well as other smaller and less diversified banks, particularly those focused on mortgages, suffered crippling losses. In principle, sound corporate governance ...