Financial Development And Financial Security Of East Asian Developing Economies

After the Asian financial crisis in 1997, developing economies in East Asia initiated a new round of financial reforms by further opening their financial markets, which have become more integrated with the global financial market. After a series of financial reforms, the financial systems of the developing economies in East Asia has been improved, the structure of financial sector that was dominated by traditionally banking activities has been altered, and the stability of the sector has been enhanced. However, in the wave of financial globalization, the financial systems of East Asian economies become easily affected by the volatile global financial market. The financial stability and sustainable development face severe challenges. Under this circumstance, external factors such as international hot money are not so important than while a country's healthy financial system, which can help the country shun away from financial crisis, or market fluctuation. This paper discusses the financial sector's development of East Asian economies, micro-financial sector's stability and potential risks in the context of globalization, and tries to find a solution for setting up a system of financial stability. In addition, the paper makes a brief survey on the financial stability of East Asian economies. Hopefully it can shed some light on China's financial reform and risk prevention.The paper contains five chapters. The first chapter is an introduction, toughs upon the purpose, structure, the main points of the paper, as well as literature overview. The second chapter briefly goes through the definitions of the major concepts including financial globalization, financial safety, among others and the major theories on financial globalization and financial safety. The third chapter analyzes the status and characteristics of international capital flow and reviews the international financial capital flow during the past one or two decades. The fourth chapter elaborates on the reform and transformation of financial system in East Asia developing economies and analyzes the impacts of financial reform on financial sector's development and stability. The fifth chapter sets up an indicator system to evaluate stability of East Asian financial sector as well as the development and stability of the banking sector. Finally, the conclusion.