Pakistan central bank chief seeks regional collaboration in capital market

The head of Pakistan’s central bank has called for enhanced regional cooperation and innovation to mitigate the risk in capital markets.

While addressing an event in Karachi on Tuesday, State Bank of Pakistan (SBP) Governor Jameel Ahmad said this cooperation was vital to build integrated capital markets capable of mobilizing investment, enhancing resilience, and fostering sustainable growth across Asia.

The governor noted that regional capital markets enable smoother capital flows, harmonized regulations, and broader investment opportunities.

For economies with low savings rates and limited bank financing capacity, integrated regional markets can serve as a critical financing channel. “When capital is allocated more efficiently, growth becomes more inclusive, resilient, and sustainable,” he said while addressing the inaugural International Capital Market Conference 2025 in Karachi.

Ahmad said no single country can 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 cited successful examples of regional integration like the Eastern Caribbean Securities Market and the ASEAN+3 Asian Bond Markets Initiative. The governor elaborated that integration can lower transaction costs, diversify risk, and broaden the investor base.

He pointed out that ASEAN+3 bond markets had expanded from 88% of GDP in 2002 to 133% in 2025—demonstrating the power of collective regional action.

To unlock similar benefits in Asia, the governor outlined four key prerequisites: alignment of regulatory frameworks, development of market connectivity infrastructure, harmonization of legal and institutional structures, and strengthening of collaboration among regulators and market participants.

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

Ahmad said Pakistan is now better placed to undertake structural reforms following recent economic stabilization. He said efforts are underway to expand access to finance, foster innovation, and build a resilient, technology-driven financial ecosystem in the country.

He highlighted SBP’s key initiatives for advancing regional and domestic integration of capital markets.

These included expanding the country’s Raast instant payment system beyond borders through its linkage with the Arab Monetary Fund’s Buna platform, as well as developing a unified digital identity and KYC framework with SECP and PSX to simplify investor access across banking, insurance, and capital markets.

“The integration of our capital markets represents a historic opportunity—to harness our own savings for our development, to strengthen financial stability, and to amplify our collective voice in the global financial system,” the governor concluded.