Asian Bond Markets and Financial System

Feature | 4 May 2012

ASEAN+3 launched the Asian Bond Markets Initiative in 2002 to improve the resilience of the financial system. This year we celebrate 10 years.

  1. Asia is home to the largest savings pool in the world and is a net lender to industrialized countries.
  2. Asian economies have around 75% of the world's foreign exchange reserves (excluding gold) and about 23% of global financial assets.
  3. ASEAN+3 launched the Asian Bond Markets Initiative in 2002 to develop local currency bond markets as an alternative to short-term bank loans in foreign currencies in order to help minimize currency and maturity mismatches.
  4. ASEAN+3 launched the Asian Bond Markets Initiative in 2002 to improve the resilience of the financial system.
  5. In 2010, ASEAN+3 and ADB established the Credit Guarantee Investment Facility to facilitate issuers' access to local currency bond markets.
  6. At the end of 2011, Emerging East Asia had $5.7 trillion in outstanding local currency denominated bonds, 7.0% more than at end 2010.
  7. The PRC has the largest local currency bond market in emerging East Asia with $3.4 trillion in outstanding bonds at end 2011.
  8. An annual record $87 billion worth of bonds denominated in US dollars, euros or yen were issued by Emerging East Asian borrowers in 2010. It 2011, this fell to $75 billion.
  9. ASEAN + 3 countries launched the Chiang Mai Initiative in 2000 in response to the Asian financial crisis of 1997/98.
  10. The Chiang Mai Initiative was initially a bilateral currency swap facility member countries could tap for emergency liquidity needs.
  11. In March 2010, its size expanded to $120 billion and it became a multilateral facility (Chiang Mai Initiative Multilateralization).