Fully Developed Debt Markets in Asia Could Help Stabilize the Region's Economy, Scholars Argue in New Book.

LOS ANGELES -- Despite strong economic growth and increasing stability in many Asian countries, the region is still without what the authors of a new volume of essays argue is vital to future prosperity: a diversified financial system that helps reduce risk and enables businesses to find alternative sources of capital.

"Asia's Debt Capital Markets: Prospects and Strategies for Development," published by Springer in conjunction with the Milken Institute, comprises studies by leading financial and legal scholars in the U.S., Asia and Europe, who make the case that fully developed debt capital markets diminish the potential for economic instability and help speed the adjustment to any financial shock.

"These essays suggest that major parts of Asia's financial markets serve its constituents poorly, even though the region has enjoyed a commendable growth performance over two generations," said Douglas Arner, Director of the Asian Institute of International Financial Law at the University of Hong Kong and one of book's four editors. "Welfare, resource allocation and macroeconomic risk management could all be enhanced by market-orientated reform."

The articles in this volume point out that more than eight years after the Asian economic crisis, the region has still not taken sufficient actions to broaden and deepen its debt capital markets. That failure was one of the motivations for the book, the editors say, along with a wish to put together a blueprint for bond-market development that might be used by other countries that lack robust debt capital markets.

"Asia's Debt Capital Markets" provides a comprehensive and detailed analysis of the importance of these markets to all countries, regardless of geographic location. It includes an up-to-date appraisal of the underlying financial infrastructure contributing to the Asian crisis and an assessment of current economic conditions. The book's 10 essays make the argument that active debt markets will improve national and regional resource allocation by providing an unbiased, visible price mechanism and widen the choices available to investors.

These updated essays stem from discussions at the first Asian Bond Market Forum, co-hosted by the Milken Institute and the University of Hong Kong, in 2003 in Hong Kong. The book is the sixth in the Milken Institute Series on Financial Innovation and Economic Growth, organized by Glenn Yago and James Barth of the Milken Institute. For more information, visit www.milkeninstitute.org.

About the Institute: The Milken Institute is a nonprofit, independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations around the world.