Economic Integration in South Asia

10

Cooperation in Financial Management

Regional financial stability is a regional public good whose provision depends crucially upon regional financial cooperation. The public good nature of regional financial cooperation is due to the fact that, financial instability is a potential public ill that spreads across countries (Giradin 2004, p. 334).

The issue of cooperation in financial management in South Asia is relatively new. The financial sectors of the countries in the region are poorly developed compared to those in place in countries where financial cooperation is of the highest order, for example, in the members of the European Union. However, the recent trend of financial globalization as well as the spectre of contagion related to the ...