Banking reform in Southeast Asia offers the reader an account of banking policies and outcomes in five countries – Indonesia, Thailand, Malaysia, the Philippines and Singapore – from 1994 to 2004. This decade covers the ‘boom, bust and recovery’ phases surrounding the financial crises of 1997–98, a tumultuous period in which the financial sector in each country underwent significant change. The book sets out to use these cases as a means of ‘fine-tuning through empirical analysis the deduced generalisations of Southeast Asian studies and discussion of globalisation’ (p. 2). ‘Southeast Asian studies’, however, appears as a rather insubstantial target, appearing more as a trope of regional similarity than bearing any relation to interdisciplinary area studies work on the region. As the book argues, the countries of the region were marked by important dissimilarities as well as commonalities at the start of the decade under study and, despite all being exposed to the shock of the crisis and the structural pressures and incentives created by common external conditions, emerged with many differences intact.
‘Globalisation’ is given more sustained attention, as a set of external conditions and processes that affect the costs, risks and rewards of different policy orientations regarding the financial sector. The book proposes that, through these positive and negative incentives, globalisation exerts pressure for change in banking policies through three channels: as a result of financial crises, as a result of international negotiation, and through technological change. Given the centrality of the financial crises of the late 1990s in the decade covered by this book, however, it is not surprising that the ‘crisis’ channel of change gets most attention. Even in the case of crisis-induced changes to banking policies, however, national-level political interests and institutions mediate the effects of globalisation.
After setting the scene with a discussion of globalisation and some basic features of banking systems in the developing world, the next five chapters of the book present a narrative account of changing banking policies and outcomes in each country covered. Each chapter traces the emergence (to varying degrees) of ‘statist–nationalist’ elements within the banking sector: either state-owned banks, or domestic banks that enjoyed protection from the full force of competition with foreign banks, sheltered by government policies that aimed to harness the banking sector to both political and developmental goals. Although ostensibly the book covers the decade from 1994, in fact the story is started before this time, although the early post-colonial years (when foreign banks dominated the banking market in most countries) do not get much attention. A concluding chapter on ‘globalisation mediated’ reflects on both the common pressures presented by globalisation and the way national governing arrangements and priorities continue to mediate its effects.
Given the enormous amount of scholarship on the banking sectors of these countries, as well as the causes and impacts of the financial crises of the late 1990s, it is hard to avoid asking whether this book brings anything new to the table. In terms of bringing the reader up to date with basic changes to policies and banking system structure after the crises, it is unfortunate that the story stops in this book in 2004. The period 2001–04 is also dealt with rather scantily, in two or three pages for each of the countries covered. There is of course potential for a broadly comparative analysis covering five well-known country cases to contribute to ongoing debates relating to the political economy of finance. This book, however, does enter into analytic dialogue of this sort, but appears to have avoided both systematic theorising and most scholarship on the political economy of Southeast Asia and the internationalisation of finance more generally.
