The SBP governor advocates for the integration of regional capital markets to promote growth and ensure financial stability.

On Tuesday, State Bank of Pakistan (SBP) Governor Jameel Ahmad underscored the necessity for increased regional collaboration and innovation to develop integrated capital markets that can mobilize investment, bolster resilience, and promote sustainable growth throughout Asia.

Jameel Ahmed, in his keynote address at the inaugural International Capital Market Conference 2025, commended the SECP for organizing the significant event and establishing a forum for collaboration among policymakers, regulators, and market participants throughout the region.

The governor stated, “In an increasingly interconnected world, regional market integration is a necessity, not an option,” while discussing the theme “Regional Integration and Innovation in Capital Markets: A New Era of Cooperation,” asserting that no individual nation can tackle modern economic and financial challenges in isolation.

He emphasized aspects of capital market integration, observing that regional capital markets facilitate more efficient capital flows, standardized laws, and expanded investment prospects. In nations characterized by low savings rates and constrained bank financing capabilities, integrated regional markets can function as a vital finance conduit, particularly for climate and infrastructure initiatives. “When capital is allocated more efficiently, growth becomes more inclusive, resilient, and sustainable,” he stated.

The Governor noted that integration might reduce transaction costs, diversify risk, and expand the investor base, citing successful instances like the Eastern Caribbean Securities Market and the ASEAN+3 Asian Bond Markets Initiative.

He noted that ASEAN+3’s bond markets have grown from 88 percent of GDP in 2002 to 133 percent in 2025, illustrating the efficacy of collaborative regional efforts.

The Governor delineated four essential prerequisites to attain comparable advantages in Asia: alignment of regulatory frameworks, establishment of market connectivity infrastructure, harmonization of legal and institutional structures, and enhancement of collaboration among regulators and market participants.

He also warned that integration poses risks of contagion and imbalance, which must be addressed by robust surveillance mechanisms and effective macroeconomic coordination.

The Governor stated that Pakistan is now better positioned to implement structural reforms after recent economic stabilization. In accordance with the SBP’s Vision 2028 and the government’s Uraan Pakistan framework, initiatives are being implemented to enhance financial accessibility, promote innovation, and establish a robust, technology-oriented financial ecosystem.

He emphasized the State Bank of Pakistan’s pivotal initiatives for enhancing regional and domestic integration of capital markets, including the cross-border expansion of the Raast instant payment system via its connection with the Arab Monetary Fund’s Buna platform, as well as the development of a cohesive digital identity and KYC framework in collaboration with the SECP and PSX to facilitate investor access across banking, insurance, and capital markets.

The amalgamation of our capital markets signifies a pivotal opportunity to leverage our savings for development, enhance financial stability, and elevate our collective influence within the global financial system. The Governor emphasized that realizing this vision necessitates enduring political resolve, regulatory collaboration, and reciprocal trust. Collectively, we can establish an area that funds its own future.