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Economy
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2000-03-20 16:21:00-05
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Hong Kong Monetary Head outlines Asian Strategy
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Asian capital flow to rise 50%, nations in region must make internal adjustments, Yam says
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Speaking to a group in Hong Kong, Joseph Yam, head of the Hong Kong Monetary Authority, predicted that capital inflow into Asia would increase by 50% over 1999 figures, reaching
$59 billion this year. Reflecting on the mistakes that led to the Asian financial crash in 1997, Yam emphasized the need to be vigilant to avoid the same pitfalls that struck the Asian nations. Yam outlined three areas of concern for Asian nations to address. The first, he said, was that globalization and liberalization of
markets required structurally sound and resilient domestic systems to be in place. He particularly emphasized the shortcomings of the Asian banking systems preceding the 1997 crisis. The second area was to comprehend better the risks associated with volatile capital flows and how to capture data to enable understanding of such flows. The last point was learning to deal with the destabilizing impact of highly leveraged institutions. Yam said not only was this a task for Asian nations, but also the entire international community. Yam concluded that tackling the above challenges would reduce systemic risks and improve the functioning of the international financial system and the stability of the financial markets.
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