Recent developments have raised some concern about the quality of banking systems in East Asia. Countries of the region must develop their financial infrastructure to sustain growth and cope with the internationalization of financial markets. Since efficient banking systems are a fundamental part of the institutional basis for East Asia's market economy, the examination of financial sector reform in East Asia focuses on building more robust banking systems and restructuring, privatizing and modernizing state-owned banks and banking systems. Building a robust banking system must involve actions to liberalize financial systems, such as efforts to improve supervision of the financial system, and design of regulations (so as to create greater incentives for market discipline), and the quality and timelines of information disclosed to the public. These efforts will encourage greater competition, as well as efforts to create incentives for prudence and sound banking.