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	Table of Contents
p. 54 of 58 BACK | NEXT Purpose and Structure of the Toolkit Part One: Introduction and Overview Part Two: Preconditions and Infrastructure for Financial Sector Development Part Three: Financial Regulation and Supervision Part Four: Regional Financial Integration I. European Financial Integration II. Trade in Financial Services III. Chiang Mai Initiative IV. Asian Capital Market Development Part Five: ADB's Intervention in the Financial Sector Bibliography Glossary and List of Abbreviations Acknowledgements

Financial Sector Legal and Regulatory Toolkit : Part Four: Regional Financial Integration

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IV. Asian Capital Market Development

Post-crisis attention to regional capital market development initially focused on the debt and money markets but has recently begun to consider wider securities market reform, with ASEAN+3 studying potential cooperation among exchanges and regulators to assist cross-border trading. Work on debt market development has comprised three collaborative efforts: the ASEAN+3 Asian Bond Market Initiative (ABMI), APEC’s efforts in developing securitization, and work by members of the Asia Cooperation Dialogue (ACD). It also includes EMEAP central banks’ pooling of international reserves in two Asian Bond Funds in 2004 and 2005, with a third fund under discussion.

APEC started a regional bond market initiative in 2003, exploring regional market development and institutions to encourage financial activity (APEC 2003). Teams have been set up to examine aspects of market development, with one seeking recommendations for securitization and credit enhancement mechanisms to improve the credit risk quality of Asian bonds. APEC asked if securitization could provide a continuous fundraising mechanism in the region and assist in the recycling of non-performing financial assets.

ASEAN+3 commissioned similar research as part of the ABMI, with working groups obtaining support from ADB resources. They reviewed the use of securitization to increase the supply of debt instruments, enhancing credit risk by providing institutional credit enhancement, improving clearing, custody and settlement systems, developing new credit rating agencies and encouraging information flows, harmonizing market regulations to best practices, and removing legal and regulatory impediments to cross-border bond investment. There was also a group established to explore cross-border local currency bond issuance by multilateral agencies, governments and their agencies, and regional companies. After the inaugural local currency bond issuance by ADB and the World Bank’s International Finance Corporation (IFC), this working group was dissolved.

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