ADB and Japan FSA Partner to Strengthen Financial Systems Across Asia-Pacific

The Asian Development Bank (ADB) and the Japan Financial Services Agency (JFSA) have signed a new cooperation agreement to deepen collaboration on financial sector development, inclusion, and stability across Asia and the Pacific. The partnership aims to enhance financial resilience, accelerate digital transformation, and mobilize investment to support sustainable growth in the region's emerging economies.

The agreement was formalized in Tokyo by ADB President Masato Kanda and JFSA Commissioner Yutaka Ito during the Asia Day event at Japan Weeks 2025. The signing underscores a shared commitment to advancing financial innovation and regulatory cooperation as Asia continues to adapt to a rapidly evolving global financial landscape.

Building Stronger, More Inclusive Financial Systems

The new cooperation framework will focus on three core priorities:

1. Expanding financial inclusion through technology – supporting digital financial solutions that provide affordable services to unbanked and underbanked populations.

2. Developing capital markets – improving financial market infrastructure, transparency, and investor confidence to attract long-term capital.

3. Enhancing financial stability and resilience – strengthening regulatory frameworks and risk management to safeguard economies from external shocks.

"More open trade and stronger financial institutions and systems are needed to ensure regional economies benefit from sustainable growth, while building greater resilience to shocks," said ADB President Masato Kanda. "Working together, we will connect global investors with Asia's immense growth opportunities and create a virtuous cycle of demand and supply for long-term capital investment."

The agreement also builds upon Japan's leadership in promoting financial stability and innovation in Asia, particularly through policy coordination, capacity-building initiatives, and technology transfer.

Unlocking Asia's Trillions in Untapped Capital

In his keynote address at Asia Day, Mr. Kanda highlighted the enormous potential of Asia's financial markets to fuel long-term prosperity. He noted that market-based financing accounts for only 14% of total corporate debt in Asia, compared with far higher proportions in advanced economies.

This limited reliance on market financing constrains growth and leaves many economies vulnerable to external financing shocks. "Trillions of dollars more could be unlocked," Kanda said, "including through global institutional investors—but doing so requires collective efforts to build deep, resilient, and well-connected capital markets."

The ADB president emphasized that stronger capital markets are essential for channeling regional savings into regional investments, reducing dependence on foreign borrowing, and financing critical priorities such as infrastructure, climate adaptation, and small-business development.

ADB's Role as a Catalyst for Regional Financial Integration

The ADB plays a pivotal role in advancing financial sector reforms and regional integration across Asia-Pacific. Through its technical assistance programs and partnerships with central banks and regulatory authorities, the Bank supports countries in:

• Developing bond and equity markets that can finance infrastructure and private-sector growth.

• Strengthening prudential regulation and bank supervision to ensure financial stability.

• Expanding sustainable and green finance to align capital flows with environmental and social goals.

• Supporting digital innovation and fintech solutions to reach underserved populations.

Mr. Kanda reaffirmed ADB's commitment to helping member countries transition toward more diversified and resilient financial systems, capable of mobilizing both domestic and international capital.

"The ADB serves as a bridge—linking Asia's growth potential with global investors seeking sustainable returns," he said. "By strengthening market infrastructure and promoting innovation, we can ensure that Asia's growth story benefits everyone."

Japan's Strategic Support for Regional Resilience

Japan, one of ADB's founding members and largest contributors, has long championed initiatives to enhance financial stability and inclusion across Asia. The JFSA has played a leading role in developing frameworks for cross-border financial cooperation, fintech regulation, and climate-related financial disclosures.

Commissioner Yutaka Ito reaffirmed Japan's commitment to the partnership, noting that resilient financial systems are vital for inclusive and sustainable development. "Our collaboration with the ADB will help strengthen regulatory capacity, enhance digital innovation, and ensure that finance contributes to building a more secure and equitable region," he said.

Toward Sustainable and Digital Finance

Both the ADB and JFSA stressed that financial innovation — including digitalization, green finance, and sustainable investment — will be at the heart of their cooperation. The partnership will support pilot initiatives that leverage financial technology (fintech) to expand access for marginalized groups, while promoting climate-resilient investments aligned with the Paris Agreement and the Sustainable Development Goals (SDGs).

Through knowledge sharing, policy coordination, and joint capacity-building efforts, the two institutions aim to build a future-ready financial ecosystem that can withstand global shocks, facilitate trade, and drive inclusive growth.

Regional Impact and Outlook

The collaboration comes at a critical time as Asia faces tightening global financial conditions, climate risks, and demographic transitions. Strengthening the financial sector's depth and adaptability will be key to maintaining the region's role as the engine of global growth.

The ADB-JFSA partnership reflects a growing regional consensus that sustainable prosperity requires not only infrastructure and trade integration but also robust financial systems that empower individuals, businesses, and governments alike.

By reinforcing the foundations of inclusive, transparent, and resilient finance, the agreement sets a new standard for Asia-Pacific cooperation in economic governance — one that aligns financial innovation with human development and environmental sustainability.