International Monetary Fund January 12, 2016 1 Capital Markets: - - PowerPoint PPT Presentation

Min Zhu International Monetary Fund January 12, 2016

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Capital Markets: Market Structure

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Stock Market Cap Debt Securities Bank Assets Total Stock Market Cap Debt Securities Bank Assets Total United States 2002 50 44 27 35 106 182 221 509 2013 36 35 13 25 133 206 95 434 Euro area 2002 16 23 30 26 52 151 388 591 2013 12 23 28 23 58 171 275 504 Japan 2002 9 16 18 16 52 175 384 612 2013 7 13 9 10 93 249 234 576 Asia (ex. JPN, AUS, NZ) 2002 9 3 6 5 52 36 129 216 2013 20 9 23 18 76 52 183 311 China 2002 2 1 3 2 27 25 148 200 2013 5 4 16 10 35 43 213 292 Share in World (in percent) Share in own economy (in percent of GDP)

Foreign assets and liabilities

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• 30
• 20
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10 20 30 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Assets Liabilities Position

Asia: International Investment Position 1

(In trillions of U.S. dollars)

Sources: IMF, IFS database; and IMF staff calculations. 1/ End-year, except end Q2 in 2015.

Financial Spillovers

10 20 30 40 50 60 70 80 90 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Equity Returns Equity Volatility

Connectedness Index: AEs to EM Asia

Source: IMF staff calculations.

2013 Taper Tantrum vs. August 11, 2015 Episode (%, Taper Tantrum = May to Jun 2013; August Episode= Aug 11 – 27)

Currencies Equities

Taper tantrum August Episode Taper tantrum August Episode

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5 10 15 20 25 30 35 10 15 20 25 30 35 Population above age 64 Population under age 15

Asia's Demographic Change (In percent of total population, 2000-2030)

Japan Korea China India Indonesia Vietnam World

Countries with aging populations 2030

Infrastructure needs

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96 323.1 718.1 100 200 300 400 500 600 700 800 MDG costs, 2010 Income gap to $2/day, 2011 Infrastructure needs, 2010

Asia-Pacific: Investment Needs per Year

(In billions of U.S. dollars)

Source: Asia-Pacific Regional MDGs Report 2014/15.

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Productivity

Inclusion: Rising, But Large Gaps Remain

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32 55 90 46 69 94 10 20 30 40 50 60 70 80 90 100 South Asia East Asia & Pacific High-income OECD Year 2011 Year 2014

Share of Adults with Accounts

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Key Policy Recommendations

Enhancing financial deepening and integration a) Mobilizing financial resources for EM Asia b) Fostering consensus on roadmap to ASEAN financial integration Building resilience a) Maintaining sound macroeconomic policies b) Strengthening macro-prudential framework and toolkit c) Continuing with financial sector reforms Strengthening policy coordination in the region a) Data and information sharing b) Harmonizing market standards and rules c) Building market infrastructure

Thank You

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