The Asian financial crisis of 1997-1998 has triggered intense efforts to promote regional monetary and financial cooperation to prevent recurrence of future crises. Recently, developing regional bond markets in East Asia has emerged as one of the key agenda for regional financial cooperation. There is no assurance, however, that the proposed regional bond markets will ever leave the drawing board. Even if they do, they may never reach the maturity to be competitive vis-à-vis global bond markets in North America and Europe. A few critical. | Developing Regional Bond Markets In East Asia The Way Forward Introduction The Asian financial crisis of 1997-1998 has triggered intense efforts to promote regional monetary and financial cooperation to prevent recurrence of future crises. Recently developing regional bond markets in East Asia has emerged as one of the key agenda for regional financial cooperation. There is no assurance however that the proposed regional bond markets will ever leave the drawing board. Even if they do they may never reach the maturity to be competitive vis-à-vis global bond markets in North America and Europe. A few critical issues arise from this perspective - If regional bond markets are to be created in East Asia would they be viable What is the economic rationale for the creation of regional bond markets in East Asia - What would be the structure and characteristics of these markets if they are to be designed to serve the needs of both borrowers and investors in East Asia - How could these markets be organized Would they emerge in the course of economic integration that has become deeper in recent years If not should East Asian governments make joint efforts to build the necessary institutional infrastructures and harmonize their financial and other standards as well as tax treatments The PECC Finance Forum undertook a study of these issues in 2003 and discussed the findings from this study at its 2nd Annual Conference held in Hua Hin Thailand on July 8-9. The present report summarizes the outcome of this discussion in terms of the rationale the strategy as well as the roadmap for the creation of Asian bond markets. What are the Asian bonds Asian bonds share three common factors Asian issuers Asian investors and Asian currencies. Asian bonds are issued by Asian entities including governments government agencies and corporations. They are denominated in Asian currencies. They will be purchased by Asian investors as well as by global investors. Rationale and Strategy Developing .
