TOKYO Asian nations need more reform of their financial sectors in order to prevent the recurrence of financial crises, Japan's Finance Ministry said in an interim report released on Wednesday.

According to the report on Asian economies and their financial sectors, Asian nations need to adopt further reform measures such as reinforcing domestic banks.

The report said Asian countries have been promoting reforms of financial and corporate sectors since the Asian currency crisis of 1997. But it urges to implement appropriate economic policies, such as structural reforms, to achieve a sustainable growth amid an economic deceleration, DPA reported.

The report also recommends Asian countries strengthen their domestic banks because they are not fully playing an intermediary role as providers of stable and long-term funds for local firms.

Asian countries generally have high savings rates and banks need to strengthen the redistribution of savings into various forms of investment, the report said.

It said many of Asia's local banks, which belong to corporate groups, need to become more independent and improve their governance to increase efficiency.

The report also said Asian countries should reinforce their stock and bond markets to provide stable funds for corporations. Such markets will supplement bank lending, it said.