11th OECD-ADBI Roundtable

Unwinding public support or tightening monetary policy too soon could risk reversing the course of economic recovery.

More than 100 representatives from government, the business and financial sectors, and academia from Asia, the US, and Europe joined the 11th OECD-ADBI Roundtable on Capital Market Reform in Asia on 22–23 February to discuss exit strategies, financial regulatory reform, growth rebalancing, and post-crisis capital market development strategy.

Appropriate timing of monetary tightening and unwinding of fiscal support is considered crucial to sustaining economic growth and maintaining its stability. Unwinding public support or tightening monetary policy too soon will risk reversing the course of economic recovery, while maintaining monetary easing and fiscal stimulus for too long may lead to inflation, asset price bubbles, and unsustainable public finance.

To better monitor and manage systemic risk, macro-prudential supervision should cover all activities posing systemic risk. Financial regulation should be extended to all complex financial products and address conflicts of interest by securities issues, ratings agencies, and advisors in the distribution chain. Financial market liberalization and reform including improved corporate governance can play an important enabling role in reducing corporate savings and promoting rebalancing of growth in Asia.

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