New Asian group to pro­mote re­gional fi­nan­cial in­sti­tu­tions

China Daily (Canada) - - BUSINESS - By JIANG XUEQING in Haikou jiangx­ue­qing@chi­nadaily.com.cn

An as­so­ci­a­tion to deepen fi­nan­cial co­op­er­a­tion in Asia is ex­pected to be launched in July, ac­cord­ing to Cai Esheng, head of the Prepara­tory Work­ing Group of the Asian Fi­nan­cial Co­op­er­a­tion As­so­ci­a­tion.

The AFCA aims to main­tain re­gional fi­nan­cial sta­bil­ity, fight against risks and make the voice of Asian in­sti­tu­tions louder in the global fi­nan­cial mar­ket.

It will also pro­mote con­nec­tiv­ity among its mem­bers, hold high-level fo­rum­sto dis­cuss the chal­lenges they face, make stan­dards on fi­nan­cial in­no­va­tion and ser­vices and build a plat­form for co­op­er­a­tion in ar­eas in­clud­ing fi­nan­cial in­fra­struc­ture con­struc­tion and risk man­age­ment.

As a non­govern­men­tal or­ga­ni­za­tion, the AFCA will be open to fi­nan­cial in­sti­tu­tions both in and out­side Asia. With38in­sti­tu­tion­san­das­so­ci­a­tions as its orig­i­nat­ing mem­bers, the group will try to ex­pand its membership to coun­tries like Aus­tralia, New Zealand and In­dia.

Cai, also as for­mer vice-chair­man of the China Bank­ing Reg­u­la­tory Com­mis­sion, said: “Once the as­so­ci­a­tion is es­tab­lished, it will in­crease the role of Asia as a whole in the global fi­nan­cial mar­ket, apart from en­hanc­ing devel­op­ment of the re­gion through con­nec­tiv­ity, co­op­er­a­tion and com­mu­ni­ca­tion.”

He said the cur­rent Asian fi­nan­cial co­op­er­a­tion setup is not adapted to the trends of fi­nan­cial glob­al­iza­tion. The main plat­form for Asian co­op­er­a­tion so far has been ASEAN plus China, Ja­pan and South Korea co­op­er­a­tion mech­a­nism. It does not in­clude deep par­tic­i­pa­tion by coun­tries in Cen­tral andWestern Asia.

At present, bi­lat­eral fi­nan­cial co­op­er­a­tion in Asia is largely con­cen­trated on trade fi­nanc­ing and cur­rency swap, which are lim­ited in scope and size. The re­gional mul­ti­lat­eral fi­nan­cial co­op­er­a­tion is still at the pre­lim­i­nary stage, hav­ing dif­fi­cul­ties in pro­mot­ing con­struc­tion of the­mon­e­tary and fi­nan­cial sta­bil­ity sys­tem, the in­vest­ment and fi­nanc­ing sys­tem, as well as the credit sys­tem.

“The AFCA will push the devel­op­ment of Asian fi­nan­cial mar­kets in many ar­eas, such as in­no­va­tion, bond is­suance and anti-money laun­der­ing. We are look­ing for ways to per­suade the pri­vate sec­tor to par­tic­i­pate in Asia’s in­fra­struc­ture devel­op­ment through pub­lic-pri­vate part­ner­ships. At the same time, we’re try­ing to find a bet­ter com­mer­cial model,” he said.

Ha Yung-ku, chair­man

of

the Korea Fed­er­a­tion of Banks, one of the 38 orig­i­nat­ing in­sti­tu­tions of the AFCA, agreed that Asian fi­nan­cial in­sti­tu­tions have to think se­ri­ously about how to play a big­ger part in global fi­nan­cial mar­kets.

“If you look at the size of the econ­omy, GDP and trade flows, Asia is very big. But com­pared with the role of Asian fi­nan­cial in­sti­tu­tions in the global fi­nan­cial sys­tem, it is rel­a­tively lim­ited due to dom­i­nat­ing global play­ers from the United States and Europe.

“Through the AFCA, we will air our voice more to in­ter­na­tional reg­u­la­tors. At least we can con­tin­u­ously make sug­ges­tions to re­flect the re­al­i­ties in the Asian fi­nan­cial mar­ket,” he said.

In his view, with this kind of plat­form, a much deeper re­la­tion­ship will be es­tab­lished among Asian fi­nan­cial in­sti­tu­tions and as­so­ci­a­tions, along with more ef­fi­cient com­mu­ni­ca­tion.

Jerry Zhang, chief ex­ec­u­tive of­fi­cer and ex­ec­u­tive vice-chair­man of Stan­dard Char­tered China, said the bank is pleased to par­tic­i­pate in the AFCA as a found­ing mem­ber.

“Un­der the con­cep­tion of con­nec­tiv­ity and deep­ened co­op­er­a­tion, we be­lieve the AFCA would act as an ef­fec­tive and in­flu­en­tial co­op­er­a­tive plat­form for the fi­nan­cial in­dus­try in Asia and pro­moteAsian fi­nan­cial and eco­nomic growth.

“The as­so­ci­a­tion would play an im­por­tant role to com­mu­ni­cate and pro­mote the Belt and Road Ini­tia­tive among the par­tic­i­pat­ing coun­tries and across the world,” she added.

The AFCA will push the devel­op­ment of Asian fi­nan­cial mar­kets in many ar­eas ...”

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