THE progress towards more financial integration in the region has been "disappointing", with banks dragging their feet on the process, said Monetary Authority of Singapore managing director Ravi Menon yesterday.
Mr Menon told a meeting of Asean bankers at the Grand Hyatt Hotel that since the 10-nation grouping laid out its blueprint for a single regional market in 2007, "the pace of financial integration has... lagged behind trade integration".
"In part, this is deliberate. In part, this is disappointing."
To be sure, "liberalising access to financial services is not as straightforward as reducing numerical tariff rates on particular categories of merchandise", he noted.
Different markets' regulatory standards, market conduct practices and conditions of licensing take time to fall in sync. Nevertheless, he called on regulators to "make up for lost time" by pressing ahead with their vision for a more integrated financial region by 2020.
"One cannot help but think that progress could have been faster than what we have seen to date."
Mr Samuel Tsien, chairman of the Association of Banks in Singapore, also noted at the 45th Asean Banking Council Meeting that each Asean economy is at a different stage of maturity. So "differences in opinions" are "natural and understandable" as countries may need to protect infant industries or certain economic activities that have important social functions, said Mr Tsien, who is also chief executive of OCBC Bank.
Even so, said Mr Menon, more than 90 per cent of the targets outlined for completion by 2015 in the Asean Economic Community blueprint have been implemented.
The blueprint calls for a European-style economic bloc that will allow the free flow of goods, services and people across the region without the constraints of a single currency.
"Virtually all goods traded within Asean are at zero tariff," Mr Menon said. "There are agreements in place to enhance protection for investors, liberalise sectors for investment, and provide greater transparency on investment rules."
He also reiterated the case for a common market to the 130 bankers and experts brought together by the Asean Bankers Association on the second day of meetings.
He said: "The 'Asean Four' - Indonesia, Malaysia, Thailand and the Philippines - are projected to grow by at least 4 per cent per annum on average over the next five years."
But growth can be as high as 6 per cent, if countries press forward with regional integration, on top of their domestic structural reforms, he said.
