- It may still be possible, and to an extent necessary, to increase productive investment in Asia, because the current investment rates of some countries may be too low to maintain rapid growth. Good financial intermediation is important for both investment and consumption. It would enable efficient channelling of financial surpluses to the sectors that need them.
This in turn would reduce companies' dependence on retained earnings for funding their investments, which may have contributed to compa-nies' high propensity to save since the Asian crisis. Well-functioning financial systems would be of particular benefit to small and medium-sized companies. - The efficacy of the financial system also affects private consumption.