The ASEAN Way: Sustaining Growth and Stability.

• Author: Lee, Cassey

The ASEAN Way: Sustaining Growth and Stability, edited by Ana Corbacho and Shanaka J. Peiris. Washington, DC: International Monetary Fund, 2018. Pp. 308.

The Asian Financial Crisis (AFC) had a deep and long-lasting impact on Southeast Asian economies. The crisis had adverse economic effects and brought about significant policy reforms in its aftermath. The overall goal of this book is to provide empirical evidence on how policies (monetary, exchange rate and macroprudential) and institutions related to the financial sector have evolved since the AFC. The volume focuses on the five original member states of the Association of Southeast Asia Nations (ASEAN-5), namely Indonesia, Malaysia, Singapore, Thailand and the Philippines. In general, the period covered straddles from the pre-AFC phase (early 1990s) to around 2017. This coverage enables an in-depth comparison between the two major economic crises that have hit the region--the AFC (1997/98) and the Global Financial Crisis (GFC, 2008/09)--and the intervening periods.

The nine chapters that make up the core of this book are organized into three parts. Part 1, which comprises two chapters (Chapters 2 and 3), provides a broad assessment of the monetary policy and financial stability in the region. Specifically, Chapter 2 examines how ASEAN-5's monetary policy frameworks have evolved over time. The chapter provides useful descriptions of the governance structure of the five central banks, their monetary policy frameworks (for example, inflation-targeting) and the supporting role played by exchange rate flexibility. The overall performance of the policy frameworks in the post-AFC period, evaluated in terms of inflation and growth, is positive. Chapter 3 then provides a useful overview of the differences and similarities in the structure of financial systems across the ASEAN-5 countries. Important similarities include the extensive presence of financial conglomerates and government ownership in the financial sector. In terms of financial stability, several measures indicate that the financial systems in ASEAN-5 economies have become more resilient in the post-GFC era (up to 2017).

Part 2, which is composed of three chapters (Chapters 4, 5 and 6), is devoted to the assessment of policy responses to global cycles and spillovers. Chapter 4 provides evidence on the impact of global financial shocks on domestic financial conditions. This is done through two transmission channels: first, the global...