Asian nations say ready to act on asset bubbles

GREATER NOIDA, India Fri May 3, 2013 10:33pm IST

Finance ministers and senior officials pose for a group photograph after the 16th ASEAN+3 Finance Ministers and Central Bank Governors' meeting at a hotel in Greater Noida, on the outskirts of New Delhi, May 3, 2013. REUTERS/Adnan Abidi

Finance ministers and senior officials pose for a group photograph after the 16th ASEAN+3 Finance Ministers and Central Bank Governors' meeting at a hotel in Greater Noida, on the outskirts of New Delhi, May 3, 2013.

Credit: Reuters/Adnan Abidi

GREATER NOIDA, India (Reuters) - Asian nations must be on guard against excessive risk taking and asset bubbles fed by central bank efforts to boost economic growth, major regional economies including Japan and China said on Friday.

Central banks in countries including Japan, the United States and Britain have been pumping out cheap money which has driven investors to seek higher returns in emerging economies around the world, driving up asset prices.

"We shall remain vigilant on the unintended negative side effects stemming from extended periods of global monetary easing," the ASEAN group of Southeast Asian nations, along with Japan, China and South Korea, said in a statement after a meeting in India.

They said they were prepared to adjust macro-economic policy and if necessary adopt macro-prudential policies, which aim to build resilience in financial systems during periods of rapid credit growth and can include caps on leverage and debt-to-income ratios.

Memories of the 1997 Asian currency crisis that led to economic collapse in much of the region mean policymakers are sensitive to the risks of volatile fund flows.

The Bank of Japan stunned financial markets last month by pledging to release about $1.4 trillion to end nearly two decades of stagnation and deflation. Bank of Japan Governor Haruhiko Kuroda said on Thursday he would monitor for any signs of unintended spillovers on emerging economies.

The meeting, on the sidelines of the Asian Development Bank's annual gathering, was not attended by China or South Korea's finance ministers, which some observers blame on renewed tension over several Japanese ministers' visits to a shrine for war dead.

A trilateral meeting between China, Japan and South Korea was also called off.

(Reporting by Rajesh Kumar Singh; Writing by Frank Jack Daniel; Editing by Ruth Pitchford)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

RBI Policy Review

RBI Policy Review

RBI keeps rates on hold, warns on inflation  Full Article 

China iPhone Sale

China iPhone Sale

China regulator approves Apple's iPhone 6 for sale in China  Full Article 

Cleanliness Drive

Cleanliness Drive

Modi orders officials to clean loos on Gandhi's birthday.  Full Article 

Bid to Boost Trading

Bid to Boost Trading

RBI takes small steps to deepen markets.  Full Article 

Car Recall

Car Recall

Maruti Suzuki says to recall 69,555 cars.  Full Article 

China Factory Data

China Factory Data

China final HSBC PMI steady in September on stronger global demand but risks remain  Full Article 

Oil Demand

Oil Demand

India's thirst for oil grows even as China cuts back  Video 

EBay Divests PayPal

EBay Divests PayPal

EBay to spinoff PayPal in 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage