SBP chief stresses market integration

Says such markets can serve as critical financing channel for economies having low savings rate

KARACHI:

State Bank of Pakistan (SBP) Governor Jameel Ahmad has emphasised the urgent need for greater regional cooperation and innovation to build integrated capital markets capable of mobilising investment, enhancing resilience and fostering sustainable growth across Asia.

Addressing the inaugural International Capital Market Conference 2025 on Tuesday, Ahmad praised the Securities and Exchange Commission of Pakistan for creating a platform for collaboration among policymakers, regulators and market participants from across the region.

Speaking on the theme "Regional Integration and Innovation in Capital Markets: A New Era of Cooperation," the governor highlighted that no country could address today's economic and financial challenges in isolation. "In an increasingly interconnected world, regional market integration is not an option; it is a necessity," he remarked.

He outlined three dimensions of capital market integration ie, why regional integration was important, how it could be effectively achieved and how Pakistan was positioned to contribute.

The governor noted that regional capital markets enable smoother capital flows, harmonised regulations and broader investment opportunities. For economies with low savings rates and limited bank financing capacity, especially for climate and infrastructure projects, integrated regional markets could serve as a critical financing channel. "When capital is allocated more efficiently, growth becomes more inclusive, resilient and sustainable," he added.

Citing successful examples such as the Eastern Caribbean Securities Market and the Asean+3 Asian Bond Markets Initiative, the governor elaborated that integration could lower transaction costs, diversify risk and broaden investor base. He pointed out that Asean+3's bond markets had expanded from 88% of GDP in 2002 to 133% in 2025, demonstrating the power of collective regional action.

He also cautioned that integration brings risks of contagion and imbalance, which must be mitigated through strong surveillance frameworks and sound macroeconomic coordination.