Developing Bond Markets in the Asia-Pacific: Moving Forward through Public-Private Sector Partnership: The Conference Chair, Dr Jeffrey L.S. Koo, Sincerely Thanks on Behalf of the Organisers All the Participants and Sponsors of the Joint Conference Held by the APEC Business Advisory Council (ABAC) and the Pacific Economic Co-Operation Council (PECC) in Taipei on May 10-11, 2004

Article excerpt

Since the 1997 Asian financial crisis, bond market development has been widely seen as a way to ensure access to long-term funds in local currencies promote economic growth and avoid the maturity and currency mismatches that caused the crisis.

Various measures to develop markets and to strengthen regional financial arrangements are underway. The Asian Bond Market Initiative is one step in the process of deepening regional arrangements, but much more remains to be done.

The conference on Developing Bond Markets jointly organised by ABAC and PECC brought together 145 experts and market players actively involved in the region's bond markets. Participants affirmed the private sector's keen interest in the deepening of the Asia-Pacific's domestic bond markets and in developing the infrastructure that would ultimately support a regional bond market. They proposed the following to achieve these goals:

1. To develop and strengthen domestic bond markets:

* Effectively co-ordinate relevant efforts of public agencies.

* Strengthen public-private partnership to promote commercial markets

* Simultaneously develop market width (the variety of product types), depth (the robustness of the investor base), and market infrastructure.

* Strengthen regulation to enhance transparency and market integrity.

* Promote openness and competition among market participants.

* Make tax regimes conducive for the holding and trading of bonds.

* Encourage securitisation and commercially based measures to support long-term financing.

2. To promote the emergence of a regional bond market:

* Promote open capital accounts and flexible exchange rates.

* Strengthen regional policy co-ordination and co-operation and promote wider participation of APEC economies in bond market initiatives.

* Develop domestic and regional credit enhancement facilities reflecting the market price of capital.

3. Capacity-building in key areas

Participants urged the Asia-Pacific Economic Co-operation (APEC) forum to intensify regional capacity-building efforts in partnership with the private sector. They identified measures and initiatives in the following four areas as key to bond market development:

* Expanding the region's institutional investor base;

* Developing a strong regional credit rating industry;

* Promoting effective insolvency and creditor rights systems; and

* Promoting convergency toward robust global accounting standards. …