This policy brief outlines various approaches and next steps that ASEAN+3 financial supervisors and central banks can consider in their financial supervision and monetary policy implementation to meet novel risk challenges, to maintain price and financial stability, and to support sustained economic growth. The welfare and economic growth in ASEAN+3 depend on the region’s ability to align economic priorities and the effective management of novel risks such as climate change or advances in artificial intelligence. There is a need to address structural challenges, associated transformations and the ability to harness future opportunities.
Central banks and financial supervisors should strengthen micro- and macroprudential frameworks, update supervisory and disclosure practices, and enhance regional cooperation to address novel risks. They must also integrate these risks into monetary policy by revising collateral frameworks, asset purchases, and credit schemes, aligning financial incentives with resilience and sustainable prosperity.
This report is a collaborative research effort jointly prepared by Aziz Durrani, Team Lead & Senior Technical Assistant Specialist at AMRO, and Julia Bingler, Fellow at the Council on Economic Policies.