Institutional Development of Capital Markets in Nine Asian Economies

This paper is conducting a comparative analysis of the development of securities markets in nine Asian economies: Korea, Taiwan, Hong Kong, Singapore, Malaysia, Thailand, Indonesia, the Philippines, and China. This study focuses on two aspects: the history and institutional development of securities market, such as legal systems, payment systems, etc. From the analyses, this paper reveals several common features of the development of securities markets in nine Asian economies. First, most economies had an informal capital market in the early period of their history. Second, the background of the foundation of their official markets was influenced by experiences of colonization. Third, most governments recognized the importance of the capital market for economic development and had a positive attitude in promoting the market. Fourth, statistics clearly showed that most economies experienced several booms in their capital market from the late 1980s.

Financial Cooperation in East Asia

This paper addresses the rationale for financial cooperation in East Asia. It begins by giving a brief review of developments after the Asian currency crisis, and argues that enhancing regional financial cooperation both quantitatively and qualitatively will require: (1) upgrading surveillance capabilities in the region, and (2) creating a clear division of labor between regional institutions and the IMF. It also mentions the issue of membership and the background forces that have led to the duplication of similar forums in East Asia. Although the concern over crisis management is the central issue in East Asian financial cooperation, other issues such as exchange rate policy coordination and fostering regional capital markets are discussed as well.

Corporate Governance in Indonesia: A Study on Governance of Business Groups

This study deals with the issue of corporate governance in the case of Indonesian business groups. It examines what factors can be attributed to failures of corporate governance. Through case studies of six different types of business groups, it evidences that self-governance by owner-managers can function well if there is no other key stakeholder and no collusion with the government. When this is not the case, however, self-governance does not work, and governance by creditors or professional managers over owner-managers has limitations. For better corporate governance, there is a need not only for building internal governance mechanism of business groups, but also for strengthening external monitoring institutions including creditors, capital markets, the governmental as well as non-governmental systems.

Negative Bubbles and Unpredictability of Financial Markets: The Asian Currency Crisis in 1997

We obtain the three following conclusions. First, business cycles depend on prices of stocks and primary commodities such as crude oil. Second, stock prices and oil prices generate psychological cycles with different periods. Third, there exist cases of "negative bubble" under certain conditions. Integrating the above results, we can find a role of a government in financial market in developing countries.