East Asia's Adoption of International Standards
Publication Year: 2008
The international financial community blamed the Asian crisis of 1997-1998 on deep failures of domestic financial governance. To avoid similar crises in the future, this community adopted and promoted a set of international "best practice" standards of financial governance. The G7 asked specialized public and private sector bodies to set international standards, and tasked the International Monetary Fund and the World Bank with their global dissemination. Non-Western countries were thereby encouraged to emulate Western practices in banking and securities supervision, corporate governance, financial disclosure, and policy transparency.
In Governing Finance, Andrew Walter explains why Indonesia, Malaysia, South Korea, and Thailand-key targets and test cases of this international standards project-were placed under intense pressure to transform their domestic financial governance. Walter finds that the depth of the economic crisis, and more enduring aspects of Asian capitalism, such as family ownership of firms, made substantive compliance with international standards very costly for the private sector and politically difficult for governments to achieve. In spite of international compliance pressure, the result was varying degrees of cosmetic or "mock" compliance. In a book containing lessons for any agency or country attempting to implement lasting change in financial governance, Walter emphasizes the limits of global regulatory convergence in the absence of support from domestic politicians, institutions, and firms.
Published by: Cornell University Press
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Title Page, Copyright
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Table 3.3. Classifi cations of Indonesian bank inspections, 1998–99 63Table 3.5. Offi cial capital and NPL ratios, major Indonesian banks, Table 4.2. CLSA summary corporate governance scores, Asia 2002 91...
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Thanks are due to various individuals and institutions who assisted in the research and preparation of this study: the staff at the Institute of De-fence and Strategic Studies at NTU in Singapore where I spent a very enjoy-able year as a visiting fellow, and Barry Desker and Yuen Foong Khong for encouraging me to apply for a fellowship there and for supporting my re-...
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IntroductionInternational Standards andFinancial Governance
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The fi nancial contagion that spread from Thailand in mid-1997 to the rest of Asia and then on to Brazil, Russia, and fi nally to the developed world’s fi nancial centers was a major shock to the global economy. It was also a shock to global political elites and a watershed in the long-running debate about the need for reform of the global fi nancial architecture. Faced with a ...
1The Asian Crisis and the InternationalFinancial Standards Project
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This chapter explains the impact of the Asian crisis of 1997–98 on the international fi nancial standards regime that emerged promptly on its heels. Although some international standards existed before 1997, the crisis played a key role in focusing international attention on fi nancial supervi-sion failures in major developing countries and in promoting the idea that ...
2A Theory of Compliance withInternational Standards
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The previous chapter argued that the rise of regulatory neoliberalism and the associated international standards project raises important practi-cal challenges for many countries, especially developing ones. This chapter has two primary objectives. First, it asks how we should understand com-pliance in the world economy and how this relates to the concept of con-...
3Banking Supervision in Indonesia
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After a deep economic and political crisis over 1997–98, the Government of Indonesia (GOI) portrayed the goal of compliance with international banking supervision standards as a core plank of its reform strategy for the banking sector and the fi nancial regulatory framework. More broadly, given Indonesia’s still bank-dominated fi nancial system, banking supervision has ...
4Corporate Governance in Thailand
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This chapter evaluates Thailand’s compliance with international cor-porate governance standards since 1997. At the outset of the crisis, there was no single set of recognized international standards in corporate gover-nance. The G7-designated standard setter in this area, the OECD, set up a task force only in April 1998 and issued the Principles of Corporate Gov-...
5Banking Supervision and CorporateGovernance in Malaysia
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Malaysia is a rather different case to Indonesia and Thailand. Of the four countries most affected by the crisis, only Malaysia managed to avoid IMF intervention and conditionality. Even so, Malaysia’s government joined its neighbors in committing itself to convergence upon international best-practice standards in spite of its reputation for macroeconomic unortho-...
6Banking Supervision, CorporateGovernance, and FinancialDisclosure in Korea
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In this chapter, I complete the assessment of compliance with interna-tional standards in the largest of the four main crisis-hit Asian economies, South Korea. I extend the scope of assessment even wider than in the previ-ous chapter to include standards in banking supervision, corporate gover-More than any of the other countries after the crisis, Korea was most ...
7Practical and Theoretical Implications
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This study began by asking three main questions. These are: To what extent do Asian countries comply with international regulatory standards? What explains compliance and noncompliance? And to what extent is mock compliance a sustainable strategy for developing countries and private sec-tor actors? In this chapter, I provide answers to these questions by drawing ...
Appendix: Key InternationalStandards and Codes
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Page Count: 256
Publication Year: 2008
Series Title: Cornell Studies in Money