The time is right for Asian nations to look at financial integration, the Asian Development Bank said in a new study, stressing the benefits for promoting growth and reducing poverty.
It said financial cooperation could also help provide a buffer against shocks that have rocked world markets in recent months, if governments worked together to cooperate on policy.
While cooperation has increased markedly since the 1997 Asian financial crisis, the Manila-based bank said it was an "immediate priority" to bolster supervision and surveillance of markets in the region.
"Asia's macroeconomic policy settings currently show little evidence of cooperation -- the region's strong and stable macroeconomic results in recent years reflect, in part, a favourable global environment," it said.
"Eventually, Asian economies may have a single market with common regulations, a common currency, and substantial freedom of movement for workers," the bank said.
"But immediate policy requires both a long-term vision and pragmatic initiatives that will show early, step-by-step results."
It said low trade barriers and well-developed transport and communications links had driven regional integration of production, attracting global investment and leading to Asia's emergence as a global manufacturing leader with China as the main hub.
But while Asia now trades about as much with itself as with Europe and North America, with an output roughly equalling those two other regions in terms of purchasing power parity, financial cooperation was still in the early stages.
"A surprisingly low share of Asia's financial resources is invested in Asian assets," the ADB said.
"Most Asian funds are intermediated through distant global markets despite the region's large savings and ample investment opportunities."
Faced with sharp exchange-rate adjustments in the face of market turmoil and the global slowdown, the bank said, Asia would also benefit from "monitoring and potentially coordinating macroeconomic and exchange rate policies."