Why Complementarity Matters for Stability—Hong Kong SAR and Singapore as Asian Financial Centers

 
Author/Editor: Vanessa Le Lesle ; Franziska Ohnsorge ; Minsuk Kim ; Srikant Seshadri
 
Publication Date: July 08, 2014
 
Electronic Access: Free Full text (PDF file size is 1,269KB).
Use the free Adobe Acrobat Reader to view this PDF file

 
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: There is much speculation regarding a “race for dominance” among financial centers in Asia, arising from the anticipated financial opening up of China. This frame of reference is, to an extent, a predilection that results from a traditional understanding of financial centers as possessing historical, geographic, and scale economy advantages. This paper, however, suggests that there is an alternative prism through which the evolution of financial centers in Asia needs to be viewed. It underscores the importance of “complementarity” rather than “dominance” to better serve regional and global financial stability. We posit that such complementarity is vital, through network analysis of the roles of Hong Kong SAR and Singapore as the current leading financial centers in the region. This analysis suggests that a competition for dominance can result in de-stabilizing levels of interconnectivity that render the global “network” as a whole more susceptible to rapid propagation of shocks. We then examine the regulatory and policy challenges that may be encountered in furthering such complementary coexistence.
 
Series: Working Paper No. 14/119
Subject(s): Offshore financial centers | Hong Kong SAR | Singapore | Asia | Financial sector | Banks | Regional integration | Interconnectedness

 
English
Publication Date: July 08, 2014
ISBN/ISSN: 9781498334464/1018-5941 Format: Paper
Stock No: WPIEA2014119 Pages: 46
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
Please address any questions about this title to publications@imf.org