Oct. 13 (Bloomberg) -- Asia's developing economies may face problems in financing their spending as the credit crisis escalates and investors demand higher yields to purchase their debt, said Asian Development Bank President Haruhiko Kuroda.

The region's policy makers should prepare plans to maintain stability in their markets to counter volatility in the global financial system, Kuroda said in a statement to the International Monetary Fund and World Bank Development Committee in Washington.

Asian stocks plummeted last week, sending the region's benchmark index to its biggest weekly drop on record, as the deepening crisis threatened to push more companies into bankruptcy. Asian economies have started to cut interest rates as policy makers shift their focus to supporting growth from fighting inflation.

``The crisis that began in the U.S. credit market has crossed to Asia, rattling investor confidence and causing large swings in equity markets,'' Kuroda said. ``The risk premium is up sharply on Asia's dollar-denominated offshore bonds, and capital can be expected to become harder to access for many of our developing member countries.''

Indonesia halted stock-market trading for a second full day on Oct. 10, while a plunge in Thailand's SET Index triggered the first 30-minute trading halt in almost two years the same day.

Asia, excluding Japan, will grow 7.5 percent this year, and is expected to expand 7.2 percent in 2009, the ADB said in a report last month.

``With the myth of decoupling now largely discounted, Asian economies see more risks and uncertainties ahead as growth slows in the U.S., Europe, and Japan,'' Kuroda said. ``Governments and monetary auhorities throughout the region must undertake corrective policy measures and shift their basic monetary stance in order to tame inflation and prevent major fiscal imbalances.''

To contact the reporter on this story: Shamim Adam in Washington at sadam2@bloomberg.net

Last Updated: October 12, 2008 19:23 EDT