Media Releases
Asian Finance Ministries and Central Banks Pledge Cooperation to Enhance Regional Financial Integration
Singapore, 3 September 2005... The Monetary Authority of Singapore and the International Monetary Fund (IMF) jointly hosted a high-level seminar on Asian regional financial integration. Delegates from 14 Asian economies attended the seminar. 2 The seminar brought together the broadest grouping of finance officials from Asia to discuss the opportunities and challenges of Asian financial integration as well as avenues to enhance regional surveillance and monetary cooperation. Delegates included Ministers, Central Bank Governors and senior officials from the region, as well as from the IMF and the Asian Development Bank. 3 Participants agreed that deep, efficient and well-regulated capital markets are essential for effective allocation of the region's savings and to strengthen the region's resilience to external shocks in a more open and globalised environment. They recognised the steps taken since the Asian financial crisis to enhance regional financial cooperation and integration. These include the Chiang Mai Initiative (CMI) as well as measures to diversify, broaden and deepen regional bond markets and link up regional capital markets. 4 In this regard, delegates noted the importance of keeping up the momentum of strengthening these linkages. They discussed putting in place the necessary financial markets infrastructure such as clearing and settlements systems and credit rating systems. They also noted that in enhancing intra-Asia integration, their economies had to remain outward looking and connected to the multilateral global system. 5 However participants also acknowledged the challenges. The key building blocks for Asian financial integration include continuing economic and financial sector reforms, the building of institutional capacity and maintaining outward-oriented policies. Delegates exchanged views on ways for Asian countries to further promote financial integration while taking into account the diverse states of development of the Asian economies. They also explored the scope for greater cooperation in capital markets development and agreed on the importance of pursuing a multi-pronged approach. This includes the harmonisation of financial regulatory and supervisory standards in Asia, consistent with international standards. 6 Delegates noted that the Chiang Mai Initiative had helped provide a useful additional safety net to complement international financing arrangements. Participants also discussed the links between trade integration, financial integration and monetary and exchange rate collaboration. On monetary and exchange rate cooperation, there was a broad consensus that developments would be evolutionary. Participants noted that as they forged common perspectives on fiscal and monetary issues and further integrated the real economy, there would be greater potential for collaboration. 7 Delegates also agreed to further their efforts in regional financial sector surveillance to monitor potential vulnerabilities in the financial system which will complement the surveillance work of international financial institutions like the IMF and the Asian Development Bank. 8. In closing, delegates expressed their appreciation to the IMF and Singapore for hosting the regional seminar. They agreed that the seminar represents an encouraging start to a series of discussions leading up to Singapore hosting the IMF and World Bank Boards of Governors Annual Meetings in September 2006. *** Notes to editor: The following finance ministers, central bank governors and senior officials attended the seminar: 1) Mr Glenn Stevens, Dy Governor, Reserve, Bank of Australia *** |