Asia's Developing Future

Asia and the Pacific have deepened economic integration through trade and foreign direct investment since the early 1990s. But financial market integration within the region has not progressed as quickly. ADBI research examining cross-border portfolio assets and liabilities in Asia and the Pacific from 2001 to 2017 shows that rapid increases in portfolio foreign assets and liabilities have taken place, particularly after the global financial crisis of 2008–2009. The crisis and the subsequent unconventional monetary easing adopted by the United States, Europe, and Japan have affected the movement of cross-border portfolio capital flows in Asia and the Pacific. When the crisis started, portfolio investment flowed out of the region. Later on during the crisis, when advanced economies eased monetary policies, and after the crisis, a new wave of cross-border portfolio investment from the United States and Europe flowed into the region in search of higher yields. ADBI researcher Eric Alexander Sugandi collaborat