From banks to markets: Malaysian and Taiwanese finance in transition

The past two decades have witnessed the exponential growth of stock markets and the significant market orientation of financial systems in Malaysia and Taiwan. These changes were well underway prior to the Asian crisis of 1997-98 but have been consolidated and accelerated by post-crisis reforms that have further institutionalized market-oriented practices. However, the changing patterns of financial markets have not preordained convergence towards the Anglo-American model of capitalism and have shown significant divergences from financial liberalism. Challenging the market-driven convergence and historical institutionalist models, this article locates the political sources of changing financial structures within the interaction between international structural forces and domestic interest alliances of private and public actors. This interactive process has not only oriented the national financial architecture towards securities markets but also made market-oriented changes different from the neo-liberal paradigm.