Organisation for Economic Co-operation and Development (OECD), 2008, "Shaping Policy Reform and Peer Review in Southeast Asia: Integrating Economies Amid Diversity". Pangestu, Mari, 2006, "Visions of East Asia: Three Engines for a Way Forward", Chapter 13 in the World Bank publication "East Asian Visions: Perspectives on Economic Development". Rodrik, Dani, 1994, "Getting Interventions Right: How South Korea and Taiwan Grew Rich", NBER Working Paper No. 4964, November. Rodrik, Dani, 2006, "What's So Special about China's Exports? ", China & The World Economy, Vol. 14, No. 5, September-October. Rodrik, Dani, 2009, "Growth after the Crisis", Prepared for the Commission on Growth and Development. World Bank, 2006, "Dancing with Giants. China, India and the Global Economy", By Eds, L., Alan Winters and Shahid Yusuf. In this paper, Asia generally refers to the entire geographical region of Asia, but with specific emphasis on East Asia and South-East Asia. However, when the latter two are referred to in the paper, it is explicitly stated. Refers to Japan (rank: 2), P. R. China (3), India (12), Korea (15) and Indonesia (19) based on 2008 nominal GDP in USD terms. Rodrik, Dani, 2009, "Growth after the Crisis", Prepared for the Commission on Growth and Development. ASEAN-5 refers to Indonesia, Malaysia, Philippines, Thailand and Vietnam. For example, for the newly industrialised Asian economies, private sector-driven growth began in earnest since the 1980s (Rodrik, Dani, 1994, "Getting Interventions Right: How South Korea and Taiwan Grew Rich", NBER Working Paper No. 4964, November).
In addition, international standards on margin requirements for non-centrally cleared derivatives have been adopted.3 By definition, bespoke derivatives cannot be centrally cleared and so do not benefit from the risk reduction and enhanced transparency associated with central clearing. To offset this, these derivatives will be required by regulation to have higher initial margin requirements, as well as variation margin. Despite these efforts, we still may not get the balance right in terms of the requirements applied to non-standard versus standardized, cleared contracts. One worry is that CCPs that are shareholder-owned and operated for profit may compete for market share by offering lower margin requirements on standardized products. This could strike the wrong balance between the private profit motive versus the public benefit of clearing. For this reason, I believe that all CCPs need to have strong governance and regulatory oversight. This must be harmonized on an international basis in order to prevent a potential race to the bottom. It is important to recognize that increased use of CCPs for central clearing also creates potential financial stability issues that must be addressed. While CCPs reduce aggregate risk, they also concentrate the remaining risk. That is, CCPs create potential single points of failure in global derivatives markets. CCPs need adequate capacity to absorb potential losses from the default of one or more of its members, and they need to have access to liquidity so that they can always fully settle their obligations.