Post-event statement

ADBI Dean Naoyuki Yoshino and OECD Deputy Secretary-General Rintaro Tamaki delivered keynote addresses on greening capital markets and the economic effects of infrastructure finance, at a roundtable on 22-23 March at ADBI in Tokyo. Dean Yoshino stressed that infrastructure can be financed through the use of long term domestic savings, including postal savings, bank deposits, and pension and life insurance funds. Such investment over the long term requires investors to be patient and requires asset management and financial education. Over 100 participants and experts discussed capital flows, bond market development, SME finance and long-term investment and savings in Asia.

Purpose

This event is designed to facilitate information exchange among policy makers and experts on issues related to capital market, finance, and long-term investment in Asia.

Background

Over the last few months, global financial conditions have gradually improved. Although the financial outlook is still clouded with many challenges, financial stability has started to gain ground, facilitated by developments in advanced markets, including the resumption of growth in the United States (US), recovery in the eurozone, and a positive growth outlook in Japan. The financial environment has also benefited from the effectiveness of monetary policies in these countries to sustain the recovery, as well as the renewed confidence of corporate sectors from increasing investment and economic risk taking.

Despite these improvements, risks to global financial stability remain. Chief among these risks is the impending normalization of US monetary policy and its implications on asset pricing, leveraging, and capital flows around the world. As recently emphasized by the International Monetary Fund in 2015, unless policy frameworks are quickly adjusted to adapt to these new conditions, the consequences in terms of disruptions in global financial assets, increased financial stress, and macroeconomic vulnerabilities will lead to a challenging environment. In addition, current uncertainties in the global economy, such as the indirect spillovers from the euro debt crisis, the slowdown in the People’s Republic of China, and declining global commodity prices, will also place significant obstacles in the way of global financial stability.

These new conditions will require more adjustments by countries around the world, particularly for the developing economies of Asia. As global financial conditions tighten (due to rising interest rates in the US), concerns over market liquidity are likely to rise, as countries and corporates alike adjust to reductions in liquidity and credit. Developing countries with strong fundamentals are expected to increase their resilience to this new market reality, but emerging countries that have relied on rapid credit growth in the past, and have very limited foreign exchange reserves and weak financial sectors, are likely to become more vulnerable to tighter financial conditions, with possible adverse impacts on risk premiums, capital flows, and market liquidity. In the face of these challenges, it is crucial that policies continue to support financial stability in order to sustain the ongoing economic recovery.

The roundtable, Capital Market and Financial Reform in Asia, established by ADBI and OECD in 1999 as a response to the Asian financial crisis, is a forum for discussion among capital and financial market regulators, policy makers, experts, practitioners, scholars, and international organizations on issues related to capital market and financial reform in Asia. Recent trends and developments in financial markets, especially in Asia, reiterate the challenges authorities face in their efforts to secure the safety and soundness of the financial system, and to improve the efficiency and effectiveness of regulatory approaches in the financial sector.

Objectives

As in previous roundtables, this year’s roundtable examines the challenges and risks facing the Asian capital markets as the global financial system transitions toward the path of greater financial stability. Among the key issues to be discussed are the implications of a less accommodative monetary policy in the US to Asia, as well as other global issues of relevance to Asia today, such as capital flow management, bond market development, financing for small and medium-sized enterprises, and promotion of long-term investment and savings in Asia.

The policy dialogue is intended to discuss and contemplate the state of the global financial system, how it affects Asian economies, and how to respond. By examining the most pressing topics facing the financial sector, this event will bring clarity by determining appropriate strategies from the perspective of the policy maker to best ensure that governments can shepherd their economies through economic uncertainties and remain on the path of sustainable growth.Identify policies and best practices to foster the interaction between global value chains and economic corridors in CAREC countries.

Participants

38 high-level officials, 2 per developing member country, coming from ministries with a direct hand in managing financial policy.

Participant responsibilities

Active participation in discussions, sharing of views and experiences, engagement in networking, and collaboration to strategize new approaches and understandings.

Output

  • Better understanding and enhanced capacity of developing member countries in tackling the shared, global challenges posed by capital markets and financial reforms, and investment financing
  • Enhanced dialogue and networking among government agencies, international organizations, and the private sector, to work together in building a more resilient and integrated approach to financial challenges
  • Promotion of good policies in using capital market reforms to stimulate growth and long-term investment in Asia

How to register

By invitation only.

Language

English

Partners

OECD and Government of Japan

Time of event

9:30 - 17:30

Event Contact