Asian Finance and Central Bank Leaders Agree to Advance Regional Financial Integration
Singapore, 25 May 2006...The Monetary Authority of Singapore and the International Monetary Fund (IMF) jointly hosted a second high-level seminar on Asian regional financial integration. Delegates from 13 Asian economies attended the seminar which brought together Finance Ministers, Central Bank Governors and senior officials from the region as well as from the IMF and the Asian Development Bank (ADB).
2 Participants recognised that the process of financial integration and monetary cooperation in Asia was significantly different from that in Europe. They noted the more market driven process in Asia, and that economic growth in the region was increasingly supported by domestic consumption and investment. Participants acknowledged the need to further advance regional financial integration in order to more efficiently channel Asian savings to investment projects in the region. This may require more open financial markets as well as further development of regional capital markets and banking systems. Such efforts would lead to a wider range of financial products and services available to regional investors and lower fund raising costs for regional corporates.
3 On the issue of greater monetary cooperation, participants discussed prospects for a common regional currency framework. They recognised that the region was seeing increasing commonalities in monetary policy frameworks. However, they acknowledged that as intra-regional financial flows could be expected to grow significantly, there was merit in preserving some exchange rate flexibility in order to accommodate market driven cross-border flows.
4 In the immediate term, participants recognised that there were specific market activities that regional financial centres could do more to facilitate. In particular, there was scope to encourage trade refinancing activities to be structured within the region to support strong intra-regional trade and investment flows.
5 The discussions on issues raised at this seminar will continue at the IMF and World Bank (WB) annual meetings to be held in Singapore this September. This is the first time that the host government has collaborated with the IMF and WB to organise the Program of Seminars or POS. Singapore has been working very closely with the two institutions to develop an Asian theme for the POS which will centre on the theme, "Asia in the World, the World in Asia".
Notes to editor:
The following finance ministers, central bank governors and senior officials attended the seminar:
1) Mr Ric Battellino, Asst Governor (Financial Markets), Reserve Bank of Australia
2) Dr Martin Parkinson, Executive Director, The Treasury, Australia
3) Dato Paduka Awang Haji Ali bin Apong, Permanent Secretary, Ministry of Finance, Brunei
4) Mr Keat Chhon, Snr Minister and Minister of Economy & Finance, Cambodia
5) Mrs Neav Chanthana, Deputy Governor, National Bank of Cambodia
6) Mr Li Yong, Vice-Minister of Finance, Ministry of Finance, China
7) Mr Wei Benhua, Deputy Administrator, State Administration of Foreign Exchange, China
8) Mr Choi Yiu Kwan, Deputy Chief Executive, Hong Kong Monetary Authority
9) Ms Shyamala Gopinath, Deputy Governor, Reserve Bank of India
10) Dr Sri Mulyani Indrawati, Minister for Finance, Ministry of Finance, Indonesia
11) Mr Aslim Tadjuddin Deputy Governor, Bank Indonesia
12) Mr Hiroshi Watanabe, Vice-Minister of Finance for International Affairs, Japan
13) Mr Akinari Horii, Director General, International Department, Bank of Japan
14) Mr Kwon Tae Kyun, Director General, International Finance Bureau, Ministry of Finance and Economy, Korea
15) Dr Gwangju Rhee, Director General, International Department, Bank of Korea
16) Tan Sri Dato' Sri Dr Zeti Akhtar Aziz, Governor, Bank Negara Malaysia
17) Mr Amando Tetangco Jr, Governor, Bangko Sentral ng Philipinas
18) Mr Tharman Shanmugaratnam, Minister for Education and Deputy Chairman, Monetary Authority of Singapore
19) Mr Heng Swee Keat, Managing Director, Monetary Authority of Singapore
20) M.R. Pridiyathorn Devakula, Governor, Bank of Thailand
21) Mr Haruhiko Kuroda, President, Asian Development Bank
22) Mr Rodrigo de Rato, Managing Director, International Monetary Fund