The global financial crisis of 2007-08 raised awareness of systemic risk in Emerging Asian countries, leading them to bolster their macroprudential policy frameworks. More recently, the challenges of climate change, and the rise of financial technology (Fintech) companies as providers of financial services, have posed additional concerns for macro-economic and financial stability. Strengthening Macroprudential Policies in Emerging Asia: Adapting to Green Goals and Fintech, produced by the OECD Development Centre’s Asia Desk, provides policy makers with analysis and policy recommendations for achieving the diverse array of objectives that meeting these challenges requires.

Macroprudential policy has gained increasing attention in Emerging Asia, particularly in the aftermath of the global financial crisis. Strengthening Macroprudential Policy in Emerging Asia: Adapting to Green Goals and Fintech provides a comprehensive overview of Emerging Asian countries’ experience with macroprudential policy. It highlights various challenges, including the interlinkages with monetary policies, measurement of macroprudential stance and the implications of the COVID-19 crisis (Chapter 1). The analysis in this publication takes a forward-looking and holistic approach by considering the role of macroprudential policy amid emerging policy challenges, such as the transition to a low-carbon economy and the rise of Fintech firms. The report discusses a series of macroprudential policy options to support the transition to a low-carbon economy (Chapter 2). It concludes with an overview of the Fintech landscape in Emerging Asia and presents some macroprudential policy suggestions for tackling the systemic risk arising in the Fintech sector (Chapter 3).

Macroprudential policy has an important role to play in supporting the transition to a low-carbon and digital economy. This Overview summarises the main points in the publication Strengthening Macroprudential Policies in Emerging Asia: Adapting to Green Goals and Fintech. Chapter 1 provides a comprehensive overview of the region’s experience with macroprudential policy and identifies the main challenges. Chapter 2 explores the systemic risks associated with climate change and stresses how countries in the region need to expand their macroprudential policy toolkits in order to tackle these risks and support low-carbon investments. Chapter 3 discusses new challenges related to the rise of Fintech and the importance of strengthening macroprudential policies to bring Fintech firms inside the regulatory perimeter.

Countries in Emerging Asia experienced a build-up of risks with stability of financial systems, particularly in the period leading up to the global financial crisis. This chapter aims to provide a comprehensive overview of countries’ experiences with various types of macroprudential measures. It also discusses some of the present challenges in this area of policy.

This chapter discusses the challenges of incorporating climate-related risks into macroprudential regulatory frameworks, including potential methodological approaches for properly capturing and quantifying climate-related risks. It also reviews some of the elements of the current macroprudential framework that could hinder investment in climate-friendly projects.

The importance of financial technology (Fintech) is increasing in Emerging Asia, providing services such as lending, payments, financial advice, and insurance. While Fintech offers opportunities to foster financial stability through the decentralisation of the banking sector, and thanks to increased efficiency, new risks might also arise. In order to address these risks, regulators in Emerging Asia should consider implementing policies that would bring Fintech firms inside the regulatory perimeter. Moreover, to avoid risks associated with the cross-border nature of Fintech activities, regulators should increase co-operation through regulatory convergence.