From the Pacific Exchange Blog
Remittances exceeded $600 billion worldwide in 2015 with more than two-thirds going to developing countries. Developing Asia receives more remittances than any other region—roughly $200 billion—and in some countries remittances even exceed foreign direct investment inflows. Meanwhile, innovations in payment systems can reduce remittance fees dramatically, increasing the earnings sent back to migrants’ friends and families—and supporting economic growth in Asia.
Many Asian economies will soon implement IFRS 9. The new standard will fundamentally change how banks determine loan loss allowances. This significant change in methodology will likely require that many banks increase loan loss provisions, resulting in lower reported earnings.
Pakistan’s recent MSCI upgrade highlights one path for frontier financial market development. While stock index categorization may serve to legitimize a market and bestow prestige, it is not necessarily the best indicator for investor sentiment. Global investors consider a broad range of indicators in considering where to deploy their capital. For frontier and emerging markets conducting financial market reform, the challenge is more complex than an index upgrade might imply.
This Asia Focus outlines the history of financial and banking reforms in Taiwan, analyzes problems that developed in the banking sector after liberalization, and evaluates current initiatives by regulators to address those problems.