ABSTRACT
Recognizing that the main cause of the 1997 Asian financial crisis was double mismatching resulting from excessive reliance on overseas funds, especially short-term bank loans, countries in the Asian region have since strengthened their financial systems through regional financial cooperation. Particularly significant is the development of domestic bond markets through the Asian Bond Markets Initiative (ABMI) and other programs. The purpose of these moves is to replace financial systems that are heavily weighted toward the banking sector with more balanced systems that are capable of supplying long-term funds, and to strengthen financial intermediary functions so that domestic savings can be linked to investment. Financial cooperation was seen as a strategy to strengthen domestic financial systems and reduce reliance on borrowing from domestic and overseas banks.
