Financial Services Liberalization and Integration in a Developing Region: The Case of ASEAN

After the Asian financial 1997/98 crisis, ASEAN free trade area (AFTA) was extended to include regional cooperation in finance. Recently, the 10-members of ASEAN have agreed to speed up the liberalization and integration of financial services by 2015. With this recent development, the main aim of this paper is to assess the main challenges that ASEAN countries are going to counter in the near future in their efforts to speeding up the process of financial services liberalization and integration and to suggest best practices to be followed in order to achieve the objective. The paper argues that the successful of financial services liberalization and integration in ASEAN depends also on a good institutional cooperation, and this latter faces several challenges, including that economies of ASEAN are diverse and heterogeneous in terms of economic systems, per capita incomes, stages of economic and institutional development, and human and social conditions, and ASEAN countries are also diverse in political systems (e.g. Myanmar versus the rest of ASEAN, or Vietnam versus Indonesia) and in cultural and religious traditions (e.g. Indonesia and Malaysia versus Singapore and Thailand), without shared history of political integration under a hegemonic power