Secretary for Financial Services & the Treasury Frederick Ma called on APEC member economies to step up efforts to enhance cooperation in developing a regional bond market.

Addressing the 10th APEC Finance Ministers' Meeting in Phuket, Thailand, Mr Ma stressed that the development of the regional bond market must be pursued from both demand and supply perspectives, and at both domestic and regional levels.

He outlined the complementary initiatives that APEC, ASEAN+3 and the Executives' Meeting of East Asia-Pacific Central Banks had taken in developing the regional bond market.

From the demand perspective, the EMEAP* Working Group on Financial Markets that the Hong Kong Monetary Authority chairs has launched a US$1 billion Asian Bond Fund, Mr Ma said.

The group is now studying a local currency Asian bond fund, the aim being to extend the concept to include bonds denominated in local currencies.

"This should further contribute to the broadening and deepening of local currency bond markets in the region," Mr Ma said.

From the supply perspective, the ASEAN+3 is studying proposals with an aim to help a wide variety of issuers access the market, and to create an environment conducive to developing bond markets.

Study groups are examining:

* the creation of new securitised debt instruments;

* issuance of debt by international financial institutions;

* regional credit guarantees and enhancement facilities; and

*both local and regional credit-rating agencies.

The APEC initiative aims to promote the understanding and awareness of the importance of securitisation and credit guarantees to bond market development in the region. 

(*EMEAP, the Executives' Meeting of East Asia-Pacific Central Banks, is a co-operative organisation comprising central banks and monetary authorities of 11 economies: Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore and Thailand.)