The diverging fortunes of financial markets in Asia and Europe were starkly illustrated in May. Eurozone markets continued to fragment but in southeast Asia integration came to the fore. The region’s finance ministers doubled resources held by the Chiang Mai Initiative Multilateralization, a 12-year-old monetary framework, to $240 billion, in a bid to increase Asia’s financial safety net. Policymakers also rubber-stamped moves to cross-list securities between regional exchanges, and China took small steps towards liberalizing its capital account.
The symbolism of these developments is seductive for Asia bulls.
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