HONG KONG, Dec 3: Asia needs a body to unify its financial markets before it can become the third major global market zone behind the United States and Europe, Hong Kong’s market regulator head said on Monday.

Andrew Sheng, chairman of the Hong Kong Securities and Futures Commission, told a conference such an institution would speed up much-needed reforms in the region.

Asia still had some way to go before it could become the third major global markets zone, due to factors such as the high number of non-performing loans held by its banks, underdeveloped risk management strategies and poor corporate governance, Sheng said.

“Unity is strength,” he told the Asian Securities Analysts Federation meeting here.

Sheng said there was no institution in place to “encourage Asian time zone centres to talk to each other”. By establishing such a financial institution, “greater cooperation can create win-win outcomes.”

Asian markets needed to improve its risk management strategy, especially regarding the one trillion US dollars it has in foreign exchange reserves, which is more than any other region in the world.

“Asia has huge savings and few products for investment and risk diversification” as well as too much money concentrated in the banking system, Sheng said.

Sheng said Asia needed to secure a bigger share of the global market for future stability.

“Once you provide services across the whole range of capital markets, you need geographical reach and that is why horizontal consolidation is ongoing,” he said.—AFP