Financial monitoring in the new ASEAN-5 countries

This paper examines the issues surrounding the implementation of global regulatory reforms—spearheaded by the G20 and mainly under the aegis of the Financial Stability Board (FSB)—in Brunei Darussalam, Cambodia, the Lao People’s Democratic Republic (Lao PDR), Myanmar, and Viet Nam (BCLMV). These countries are the five newest members of the Association of Southeast Asian Nations (ASEAN). As such, there has been little consideration of the impact of global regulatory reforms on these countries. This paper contributes to the literature by providing an analysis of the capacity of the BCLMV countries to implement necessary financial regulatory reforms. Further, this analysis supplements ongoing efforts to establish the building blocks for the ASEAN Economic Community (AEC), which is scheduled to be implemented by 2015. Toward this end, the paper addresses six key development issues in the CLMV countries: (i) financial regulatory and supervisory systems, (ii) compliance with capital adequacy and liquidity management guidelines under the Basel reforms, (iii) macroprudential surveillance systems, (iv) transparency and disclosure, and (v) capital flow management.