While developing the regional capital market, the Asian region would help global financial stability in three ways: (i) by promoting economic growth in the region to support the financial sector growth and eventually avoiding financial crisis as in the recent past, (ii) by retaining the savings of the region within the same region and avoiding a big vulnerability related to global capital outflows, inflows and their reversals, and (iii) by reducing the load of excess financial flows to the European and American markets and preventing the banks and financial institutions in these economies from over-leveraging with the availability of easy funds.
Profit transfers on the basis of intragroup profit transfer agreements are not affected by this restriction, however. Some life insurers did not actually conclude a profit transfer agreement with their parent company until 2014 with an eye to being able to distribute profits in spite of this restriction. In individual cases, this undermines the original objective of the moratorium on dividend payments.