It is important that Asian policy-makers let their domestic financial systems do their job. We must acknowledge the difficulty and the time that this will take. And we should acknowledge that progress has been made in the banking and financial systems of several countries since the Asian crisis of 1997-98.
But even with that progress, it will still be some time before markets in that region are functioning at their optimal efficiency. And it will be some time before households in Asia have sufficient and appropriate incentives to reduce savings and increase their consumption. This is not just an Asian problem.