The Lehman Shock and the ensuing global financial crisis reminded central banks around the world of the importance of fostering a sound financial system with a resilient funding environment for financial institutions and deep and liquid interbank markets. We have also observed that banks have been increasingly expanding their presence in other economies in the region.
This is one of the reasons why Asian central banks are progressively making efforts to enhance environments for the funding of local currencies. The Bank of Japan has already agreed to establish cross-border collateral arrangements with many Asian central banks (Chart 12).