Roundup: Bankers Urge Asia to Continue Banking Reforms

Asian nations ought to push ahead with their much-needed reforms in the banking sector while embracing the globalization trend, bankers attending an Asian economic forum said Monday.

Outlining priorities for Asian countries in the decades ahead, David Eldon, chairman of the Hong Kong and Shanghai Banking Cooperation Ltd., cited the financial reforms underway in many Asian nations as the most urgent task.

"The first priority is that the reform process, sparked by the Asian crisis and now hopefully reignited by the global downturn, must continue," said the senior banker with HSBC.

Eldon noted that several economies in the Asian region have made positive steps towards building a more robust financial system, and some of their ailing banks have been recapitalized and restructured.

Among strengthened regulatory supervision has been strengthened and enhanced credit-approval and risk management process, Eldon said that some governments in Asia also have tackled issues that were formerly taboo, such as opening local markets to greater foreign ownership.

But, "more remains to be done if Asia is to develop a financial structure capable of withstanding fluctuation in capital flows," he said.

Wang Xuebing, president and CEO of China Construction Bank, joined Eldon in pressing for "continued in-depth financial reforms " and "building a healthy financial banking system" in Asia.

Underdeveloped financial markets, inadequate financial regulation and lack of policy coordination are hurdles facing many Asian economies when it comes to building a sound financial mechanism and forming regional links, said Wang.

He stressed the need to complete and innovate on ownership system and corporate governance, improve and innovate on market system, perfect regulatory mechanism and reconfigurate banks' operating mechanism.

Both Wang and Eldon agreed that globalization is an inevitable trend that Asian nations cannot afford to miss out. "Asia must embrace globalization and avoid migrating to protectionism," said Eldon.

Chulakorn Singhakowin, president of Bank of Asia Public Company Ltd, agreed, based on his experience in Thailand, that the opening up of the financial market is an "incontrovertible thing."

The bankers called for enhanced intra-regional links across Asia, so as to increase the flows of capital and investment as well as goods and services across regional boarders.

They also expressed optimism on the role of Asia in the future world. Eldon, in his so-called "best case" scenario, predicted that "Asia would have several financial centers equal to those in the West."

The reasons to be optimistic about Asia include Asia's financial resources, its human resources and its appetite for social and infrastructural improvement, said Eldon.

As for financial resources, economies in Asia hold the top five positions in terms of foreign currency reserves, Eldon said. There are also high level of personal savings rates in many parts of Asia.

In terms of human resources, the region is the most populous in the world and the potential for domestic demand is enormous, Eldon said. Besides, people there have tasted success in the past and they want to expand their success, which "are all the required ingredients to be a powerful engine for global growth, " he said.






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