Policy Initiatives Review
a) Voluntary Action Plan for Supporting Freer and More Stable Capital Flows: The Policy Dialogue on Savings and Capital Market Development (New Zealand, Chile, Vietnam)
The first workshop under the Policy Dialogue on Savings and Capital Market Development was held on 1 September 2006 in Hanoi. The Policy Dialogue is a multi-year initiative that contributes to the Voluntary Action Plan on Freer and more Stable Capital Flows (proposed in 1997 and endorsed by Ministers in 2000). The first workshop examined the relationship between savings and the development of strong and liquid capital markets.
Expert speakers at the workshop put forward a set of policy recommendations to initiate a virtuous cycle of savings and capital market development which may contribute to increased economic growth. Regulation, tax incentives, fiscal policy, and market information were presented as potential policies to help initiate this cycle.
Participants at the workshop suggested a set of topics for the forward agenda. Items of high interest included pension fund regulation/management, fiscal policy, taxation, and savings scheme design. Co-chairs will consult member economies inter-sessionally to further develop a work programme for consideration by TWG 1 in December 2006.
b) APEC Finance and Development Program (AFDP) (China and the World Bank)
With support from APEC member economies and international financial institutions, Asia-Pacific Finance and Development Center (AFDC) has continued its efforts on capacity building in the fields of finance and development. Focusing on issues of regional concern, AFDC has organized four training workshops by the end of August, with a total of 195 delegates from 15 APEC economies participating. There will be two more training workshops, named "Bank Risk Management" and "Corporate Bond Market", in November, 2006 in Shanghai, China. Besides face to face training activities, AFDC has successfully delivered its 4 training workshops to Mongolia, Vietnam, and several cities in China through the Global Distance Learning Network (GDLN) of World Bank. More than 200 local participants joined the workshops.
The first AFDC Biennial Forum will be held on 21-22 September, and its preparation work is now progressing smoothly. The Forum, under the theme "Innovation for Development", will be a high-level platform for in-depth communication among government authorities, academia and business. AFDC warmly welcomes all APEC member economies to participate in the upcoming forum.
The information about AFDC, including workshop materials, can be found on the website www.afdc.org.cn.
c) Deepening Prudential Regulatory Capacity in Non-Life Insurance (Australia and the US)
This initiative to run a capacity building training course for non-life insurance regulators was endorsed by the 21st TWG meeting in Quang Ninh, Vietnam, in December 2005. The proposal will be undertaken in close collaboration with public and private sectors. The training course will take the form of a six day intensive format in Melbourne, Australia, in the first half of 2007.
The initiative will be supported by the Melbourne APEC Finance Centre, which has recently been created in the Australian APEC Study Centre, funded by the State Government of Victoria, Australia. At the 13th FMM, Finance Ministers welcomed the establishment of the Centre.
d) APEC Future Economic Leaders' Think Tank (Australia)
The annual Future Economic Leaders' Think Tank, now in its 6th successive year, was formally launched at the Beijing APEC Finance Ministers' Technical Working Group meeting in December 2000. The 6th annual Think Tank was held on June 28-30, 2006 in Sydney, Australia. More than 27 representatives from 19 APEC economies attended the 6th Think Tank. The topic of the event was "Securing International Capital Flows". This topic was chosen to complement one of the 13th FMM themes, namely "Financial Sector Reform to Attract Capital Flows".
e) APEC Financial Regulators Training Initiative (FRTI) (US and the ADB)
The Financial Regulators Training Initiative has made significant progress in achieving its objectives of strengthening content and management of the national training programs and developing regional programs for junior and mid-level banking supervisors and securities regulators. Since the inception of Phase II in 2001, the Initiative has trained more than 1,600 participants from APEC economies in 32 regional and 13 national courses. Thus far in 2006, three regional seminars on bank supervision have been held: a Bank Analysis and Examination School in April, in Manila, Philippines; a Risk-Focused Supervision and Risk Assessment program in July, in Perth, Australia, and an Operational Risk Management session in August, in Kuala Lumpur, Malaysia. A fourth program, The Fundamentals of Interest Rate Risk Management session will be held in Hong Kong, China in November. Two seminars were conducted under the securities regulation component of this training initiative: Regulation of New Products in May, in Kuala Lumpur, Malaysia and Investigation and Enforcement held in July, in Manila, Philippines. The seminar on Risk Management and Internal Controls will take place in Chinese Taipei in October.
The Advisory Group (AG) provides support and guidance for the training needs and activities under the Initiative. At the 11th AG meeting held at the ADB Headquarters in Manila, Philippines on 14 July 2006, the AG members confirmed their continued support for the Initiative in 2007. For the last two years, Bank Negara Malaysia chaired the AG for banking supervision while the Securities Commission of Malaysia chaired the AG for securities regulation. For 2006 ? 2008, the Hong Kong Monetary Authority and Securities and Exchange Commission, Philippines will chair the advisory groups for banking supervision and securities regulation, respectively. For 2007, the training program for banking supervision will comprise regional courses on Risk Focused Supervision, Fundamentals of Interest Rate Risk Management, Operational Risk, and Consolidated Supervision of Market Risk. Next year's program for securities regulation calls for regional seminars on Investigation and Enforcement, Market Supervision, and Collective Investment Schemes / Hedge Funds.
f) APEC Financial Institutions Dealing with SMEs (Incombank, Viet Nam)
The Industrial and Commercial Bank of Vietnam (Incombank), the host of the 3rd Annual Meeting served as a secretariat for cooperation activities among MOU signatory members for the period of July 2005 to July 2006. The 3rd Annual Meeting took place in Hanoi on 26 July, 2006, providing opportunity for signatory members to review recent cooperation activities, and discuss the possibility of strengthening the cooperation among MOU members on a multilateral basis.
After the Annual Meeting, Incombank hosted a conference on July 27 on "Strengthening support and cooperation for the development of APEC SMEs" with the participation of approximately 200 delegates from MOU members, institutions and individuals related to and interested in SME financing. The conference focused on two major themes including "Improving financial access for SMEs" and "Fostering business development services for SMEs".
Delegates and conference participants expressed their appreciation that the implementation of the third Annual Meeting and the Conference was a significant step towards greater cooperation among APEC financial institutions dealing with SMEs, that would bring about better environment for micro, small and medium enterprises of participating economies. Participants urged other financial institutions from APEC economies to join in such cooperation.
g) Insolvency Reform Initiative (Australia)
This Insolvency Reform initiative received endorsement at the APEC Finance Ministers' TWG meeting in Gyeongju on December 2004. Phase One of the Insolvency Reform initiative was implemented through the Forum on Asian Insolvency Reform (FAIR), held on 27-28 April, 2006 in Beijing, China. Forum participants to the forum included 150 representatives from 24 economies (both APEC members and non-members) and 6 international organisations. The forum encompassed a general assessment of Asian reforms in the last decade, and specific topic discussions on reorganisation, informal workouts, courts and regulatory institutions, priority claims, creditor participation, corporate groups, and cross-border insolvency.
Phase Two of the initiative was endorsed by the 22nd TWG Meeting in Nha Trang, Vietnam. Its objective is to establish a regional network to monitor, and ultimately provide a source of information on and advice about, improvements to insolvency systems in Asia on an on-going basis.
h) Reform of Financial Sector Initiative (Australia, Indonesia, China, Japan and Vietnam)
The initiative on Reform of the Financial Sector received endorsement at the APEC Finance Ministers' TWG meeting in Gwangju on June 17, 2005. The overall aim of this initiative is to discuss how member economies have developed and implemented reforms and strategies to strengthen their financial sectors.
A policy dialogue in the form of a 2-day workshop was held in Shanghai, China on 3‑4 July, 2006 to exchange views on how APEC economies have developed and implemented reforms to improve financial frameworks. A second workshop, which will be held in Lombok, Indonesia, on 29-30 November 2006, may focus on capacity constraints to further development and other issues that have been identified, including possible capacity building activities. The final report on the initiative will be submitted to the APEC Finance Ministers' Meeting in August 2007.
i) Fiscal Management Initiative (Australia, Vietnam, Indonesia)
This collaborative Fiscal Management initiative received endorsement at the APEC Finance Ministers' TWG meeting in Gwangju on June 17, 2005. The first workshop of the initiative was held in Hanoi, Vietnam on 27‑28 February 2006, and included participation by 74 officials from 17 economies (including Laos and Cambodia) and representatives from International Financial Institutions and the private sector.
The first workshop discussed a broad range of fiscal risk management topics including fiscal risks from public-private partnerships, fiscal risks from state-owned enterprises, and the importance of transparency for managing risk. A range of topics that may be covered at the second workshop were identified: fiscal risks from future public pension obligations; fiscal risks arising from sub-national governments; and the management of contingency funds created to address future budget pressures or the realization of contingent liabilities. The second workshop will be held in Lombok, Indonesia, on November 27-28, 2006 back to back with the second workshop on financial sector reform. The final report on the initiative will be submitted to the APEC Finance Ministers' Meeting in August 2007.
j) APEC Policy Response to Aging issue (Korean proposal)
This initiative was endorsed by 13th APEC Finance Ministers in September, 2006, in Hanoi, Vietnam. Recognizing the importance of aging issues in various areas including economic development, fiscal policy, and financial market development, Korea proposed this multi-year initiative with the objectives of (i) finding a commonality amongst the domestic reforms conducted by each APEC economy and derive an effective policy guideline on a voluntary basis; and (ii) calling for a comprehensive group, including experts from member economies as well as from IFIs, aimed towards policy formulation and recommendation that reports to the APEC Finance Ministers.
Korea will prepare a further developed proposal at the 23rd TWG meeting in December of this year.