Pakistan-China Financial Market Integration (W-165)

Pakistan-China Financial Market Integration (W-165)

Publication details

  • Friday | 01 Feb, 2019
  • Vaqar Ahmed, Rabia Manzoor, Abbas Maken
  • Working Papers
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Rabia Manzoor, Vaqar Ahmed and Abbas Murtaza Maken
 
ABSTRACT
 
This study examines how the greater financial market integration can be promoted between China and Pakistan. Based on secondary data and stakeholders’ interviews, the study explores the possible opportunities and key challenges arising due to financial market integration. Over time, both the
countries have made efforts to develop and integrate several financial market segments. The study analyzes the macro-economic dependence, volatility, current liquidity, efficiency and integration level of key financial market segments-money, equity, forex and government securities. It identifies that lack of coping mechanisms for systemic risks, inadequate joint financial guarantee instruments, meager  portfolio investments in stock markets, and low uptake of currency swap are the major challenges in the way of financial market integration. It concludes that a greater understanding of financial services in economies, promotion of investors’ confidence and long-term interests, greater competition and
corporate governance in financial sector of Pakistan can help promote greater financial integration and trade in financial services.
 
Keywords: financial market integration, cross-border capital mobility, brokerage firms, stock exchanges, securities markets