The World Bank on Thursday suggested East Asia to further diversify its financial markets by developing its security markets.
"The East Asia needs and is well positioned to enhance its financial systems to meet the growing and increasingly sophisticated demand for financial intermediation in the region," said Homi Kharas, the World Bank's Chief Economist for East Asia and the Pacific, at a press conference in Singapore Thursday.
Kharas said East Asia's financial system has witnessed a remarkable transformation over the past decade, citing that the region has emerged more resilient from the debilitating crisis of 1997 and accumulated 1.6 trillion U.S. dollars in foreign exchange reserves and 9.6 trillion dollars in financial sector assets at the end of last year.
"These developments have reshaped the financial landscape in the region that now provides an opportunity for deepening and extending the reach of the financial sector," said Kharas.
The World Bank released its latest report "The Road to Robust East Asian Financial Markets" here Thursday, just ahead of the IMF/ World Bank Annual Meetings, which is expected to open in Singapore next week.
The report said that although security markets have grown by 300 percent in the region in the last nine years, the banking sector, with 5.5 trillion U.S. dollars in assets, still dominates East Asia's financial sector.
"Deep and efficient securities markets will make an important contribution to meeting more sophisticated needs and to improving the resilience of the financial sector," said Swati Ghosh, lead author of the report.
To further develop the securities markets, the report stresses the need for greater liquidity and efficiency. It also said that regional financial integration could significantly enlarge the gains from domestic policy measures and make the development of domestic financial markets more viable.