The Asian Shadow Regulatory Committee (ASFRC,
The committee, composed of 14 independent experts on economic and financial policy issues from 10 Asian countries, the US and Europe, reached a resolution yesterday that included recommendations on how to pave the way to the long-term realization of an Asian bond market initiative.
According to Ghon Rhee, director of the Asia-Pacific financial-markets research center at the University of Hawaii, the committee urges East Asian economies to liberalize their capital accounts and eliminate legal and institutional impediments so as to facilitate access to global markets -- of which a regional bond market would become a part.
The committee's resolution said that before an Asian bond market can be created, the region's economies should strengthen domestic market institutions and build necessary financial-market infrastructure to support the development of domestic bond markets -- while focusing on credit enhancement and credit support efforts for small and medium-sized enterprises and bridging the credit gap between sovereign and quasi-sovereign borrowers.
The committee yesterday stressed the importance of a formal policy dialogue among Asian economies for cooperation and coordination of fiscal, monetary and exchange-rate polices and capital-account and trade liberalization.
Taiwan is excluded from the Asian bond market initiative, which is spearheaded by several public-sector organizations, including APEC.
But Hu Sheng-cheng (
At yesterday's meeting, Hu said that the nation's competitive advantage lies not only in its expanding bond market but also in its complete system for bond trading, clearing and settlement.
Hu expressed support for financial integration in the region, saying that "the highest level of regional financial integration is ? the establishment of an Asian Monetary Union using a single currency."
Other committee members yesterday expressed concerns about many hurdles -- including political disagreement, highly-differentiated financial systems and difficulties in monetary coordination.
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