## Building Frameworks for Financial Stability in Asia

## Source details

**Canonical URL:** [Building Frameworks for Financial Stability in Asia](https://www.imf.org/en/capacity-development/cd-stories/asia-building-frameworks-for-financial-stability)

## Other formats

- [Markdown version](/en/capacity-development/cd-stories/asia-building-frameworks-for-financial-stability/index.md)
- [Structured JSON version](/en/capacity-development/cd-stories/asia-building-frameworks-for-financial-stability/index.json)
- [Bundle manifest](/en/capacity-development/cd-stories/asia-building-frameworks-for-financial-stability/bundle-manifest.json)

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### Challenge
- Financial stability in Asia is a key policy priority.
- Over the past 20 years, Asia has been the fastest growing region in the world, now making up around 30 percent of the world’s GDP.
- As the region grows, Asian financial sectors have become bigger, more complex, and closely intertwined.
- Experience from the 1998 Asian Financial Crisis spurred strong reforms to manage financial sector growth and address risks to financial stability.
- Cross-border financial institutions and activities make monitoring associated risks more challenging.
- Critical priorities identified:
  - Consolidating monitoring and supervision of financial conglomerates to detect systemic risks.
  - Ensuring harmonized institutional and regulatory frameworks across jurisdictions.
  - Strengthening regional information sharing.
  - Establishing arrangements for failing financial institutions that are intertwined across borders.

### Approach
- The IMF has extended knowledge sharing to address system-wide risks through macroprudential oversight.
- An increasing number of emerging and developing markets in Asia are instituting systematic approaches to monitoring financial stability.
- Key elements of country-level capacity building:
  - Establishing dedicated financial stability functions.
  - Building internal systems and technical skills for macroprudential oversight.
- The IMF works with countries on four principal components of an effective financial stability framework: organizational structure, monitoring, analysis, and policy.
- An effective financial stability framework leads to:
  - Policy responses that are targeted, clearly defined and communicated.
  - Coordination with all relevant agencies.
  - Support from crisis management and resolution arrangements.
  - Defined accountability and clarified responsibilities during periods of stress and instability.

### Impact
- Emerging economies making measurable progress include Indonesia, the Philippines, and Thailand.
- Specific institutional developments:
  - The Bank of Thailand inaugurated its own Financial Stability Unit.
  - The Philippines’ Central Bank (BSP) is in the process of setting up a dedicated financial stability function.
  - The Bank of Indonesia is developing capacity for systemic risk assessment, macroprudential oversight, and stress testing.
- Outlook:
  - Emerging market and developing countries in Asia are expected to continue advancing their approaches to safeguarding financial stability.
  - The IMF will continue to support and work with these countries to advance their stability agendas.

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## Content in this bundle

- **Partnerships for Capacity Development**
  - [Partnerships for Capacity Development (Markdown version)](/-/media/files/capacity-developement/brochures/imf-partnerships-brochure-september-2019.pdf.md){rel="alternate" type="text/markdown"}
  - [Partnerships for Capacity Development (PDF)](/-/media/files/capacity-developement/brochures/imf-partnerships-brochure-september-2019.pdf){rel="external" type="application/pdf"}
- **Regional Capacity Development Centers**
  - [Regional Capacity Development Centers (Markdown version)](/-/media/files/capacity-developement/brochures/regional-capacity-development-centers-brochure-september-2019.pdf.md){rel="alternate" type="text/markdown"}
  - [Regional Capacity Development Centers (PDF)](/-/media/files/capacity-developement/brochures/regional-capacity-development-centers-brochure-september-2019.pdf){rel="external" type="application/pdf"}

---

## References

- [IMF Capacity Development](https://www.imf.org/en/capacity-development)
- [Digital Training Catalog](https://www.imf.org/en/capacity-development/training/icdtc)
- [Capacity Development Strategy](https://www.imf.org/en/capacity-development/strategy-policies)
- [Country Stories](https://www.imf.org/en/capacity-development/cd-stories)
- [Global - Developing Sectoral Accounts and Balance Sheets in Colombia, Indonesia, and Peru](https://www.imf.org/en/Capacity-Development/cd-stories/cd-stories-colombia-indonesia-peru)

_Source: https://www.imf.org/en/capacity-development/cd-stories/asia-building-frameworks-for-financial-stability_