Asian governments were told on Wednesday to step up the pace of reform, to strengthen financial regulatory frameworks and align monetary policies with fiscal measures.
“Substantial progress has been made but much more needs to be done,” Singapore's second minister for Finance Lim Hng Kiang told the opening of the (ASEAN) economic associations annual conference in Singapore.
“We need to press on and prepare our financial systems for the challenges of the future,” Lim said.
“In the so-called new economy, the role of financial intermediaries will be greatly amplified,” he said, after the 1997 regional meltdown highlighted the inability of Asian monetary authorities to adjust to changes in global financial markets.
“Central Banks can no longer think of monetary policy as merely the adjustment of monetary policy instruments or intermediate targets,” He said.
Monetary policy needs to operate within a framework of consistent macroeconomic policies, and be supported by strong economic institutions.
Governments needed to be aware that monetary policies will only be successful in creating economic stability if they are complemented by a sound fiscal policy.
“Monetary policy cannot bear the burden of macro stability alone,” Lim said.
Bureau Report
