[asia-apec 443] Statement from the APEC Finance Ministers Meeting (Part 3 of 3)

[PAN Asia Pacific]

(Cont'd)
Other Matters and Future Meetings 

44. We welcome the progress made by the Sub-Committee on Customs
Procedur es (SCCP) in their twelve-point collective Action Plan to
facilitate trad e in the region. The "Blueprint for APEC Customs
Modernization" and the " Guidelines for SCCP and Business Strategic
Partnerships" are important co ntributions for strengthening
co-operation with the business community.

Reaffirming that trade facilitation and enforcement must be well
co-ordin ated, we encourage customs authorities to continue
strengthening such co- operation. 

45. We also encourage our officials to expand coverage of bilateral
tax t reaties with appropriate economies in the region in conformity
with inter national norms and to continue the useful dialogue on
taxation through AP EC-OECD joint symposia of tax officials. We look
forward to the results o f the next APEC-OECD tax symposium in
Manila.

46. We reaffirm our appreciation to the APEC Financiers Group for
their o ngoing participation in the APEC Finance Ministers'
process. We had a ver y useful discussion with the Group on the
importance of implementing the necessary measures to resolve in a
timely manner Year 2000 problems in ou r economies. We urge the
World Bank and the ADB to help economies to addr ess this issue. We
call on the supervisory and regulatory authorities in our economies
to work with one another, and with the Basle Committee on B anking
Supervision, IOSCO, and the IAIS as they review and monitor Year
2000 compliance efforts by all financial institutions. 

47. We would like to thank the people and Government of Canada and
the De partment of Finance for the hospitality extended to all the
delegations a nd the excellent arrangements they have made to make
the fifth APEC Finan ce Ministers Meeting a success. We also thank
the chairman of the APEC Fi nance Ministers Meeting, the Honourable
Paul Martin, for his valuable con tribution to the success of this
meeting.

48. We look forward to the next meeting of APEC
Finance Ministers in Pena ng, Malaysia.

49. Finally, we will report to the APEC Economic Leaders on the
outcomes  and recommendations of this APEC Finance Ministers Meeting
and on any sub sequent and related matters, on the occasion of their
next meeting in Mal aysia in November.

Annex A

Regional Forum on Securitization: Although securitization is fast
becomin g an important source of financing, many structural,
regulatory, fiscal a nd other obstacles continue to inhibit its
further development. In an eff ort to begin to address these
obstacles, an international conference on s ecuritization and a
workshop for regulators from within the APEC region w ere held in
Kuala Lumpur, Malaysia last December. A survey on the status  of
securitization activities in APEC member economies was carried out
to gather information on these activities in APEC economies and to
identify pertinent developmental issues and regulatory concerns.
Based on the outc ome of these activities, we encourage the
development of securitization a ctivities through (i) the continued
removal of impediments to market deve lopment; (ii) enhanced
training and technical assistance to facilitate th e removal of
impediments to market development; and (iii) the continued s haring
of expertise among our economies.

We have adopted a voluntary action plan to assist individual member
econo mies that are interested in accelerating the development of
securitizatio n activities in their own markets.

Regional Forum on Pension Fund Reform: Officials from many of our
member economies, together with academics and experts from the
IFIs, attended th e Regional Forum that was held from February 4-6
1998, in Cancun, Mexico. The forum had as overall objectives the
interchange of expertise, inform ation and best practices of
pension systems across the APEC region, and t he discussion of: the
lessons of Latin American pension reforms for APEC economies; the
potential for reform and its impact on the development of financial
markets, domestic savings, and income distribution; the strateg ies
for the administration of pension funds; the prudential regulation
of pension funds investments; and the relative role of the private
and the public sectors in pension fund management. A background
report describing the pension systems of the APEC economies and
outlining the major issues and difficulties was prepared by the
ADB.

We recognized that pension funds can play an important role in
mobilizing private savings, and broadening, together with other
institutional inves tors, the demand base, especially for long-term
debt instruments. Moreove r, permitting pension funds to invest in
financial instruments other than low-income government bonds can
greatly enhance the supply of long-term finance to the private
sector. We also recognized that factors such as ag eing
populations, low levels of national savings, unsustainable pressure
on public finances and distortions created by high social security
contri butions make pension fund reform a priority for many APEC
economies, plac ing it at the top of the economic and social
agenda. While pension reform s can be spread along a broad spectrum,
a sound prudential and regulatory framework is necessary for all
types of public and private pension schem es.

Strengthening Financial Market Supervision: Recognizing the
importance of sufficiently trained financial supervisors, we
assessed the adequacy of existing training programs for both bank
supervisors and securities regul ators. We identified significant
unmet training needs and limitations in the training management
process at the domestic level, and determined tha t enhanced
regional and international co-ordination to address these conc erns
would be useful. Importantly, we recognized that improvements in
tra ining programs would only be effective in enhancing the quality
of superv ision where a sound supervisory and regulatory regime is
in place, and th at training programs should be based on sound
supervisory and regulatory principles.

Based on these results, we agreed to implement in a timely and
comprehens ive manner the Action Plans for Strengthening Training
of Bank Supervisor s and Securities Regulators in APEC economies.
The Action Plans include m easures to improve the quality of
training programmes at the domestic lev el and to strengthen
co-ordination in meeting training needs through regi onal and
international programmes. Regional advisory groups will be estab
lished to oversee the implementation of the Action Plans, while the
day-t o-day responsibilities will be overseen by a secretariat to
be funded and located at the ADB. We thank the ADB for its valuable
assistance in impl ementing the Action Plans and for funding the
secretariat and the technic al assistance requirements of both
plans.
 
 Enhanced co-operation among export financing
institutions: Export financi ng institutions (EFIs) can play a
catalytic role in mitigating risks and  mobilizing private-sector
financing for infrastructure development.  Repr esentatives of the
Export Financing Institutions (EFIs) in the APEC regio n have met
several times to discuss the role of EFIs in promoting private
sector infrastructure projects, including the opportunities for
co-opera tion among EFIs through information exchange, knowledge
transfer, possibl e co-lending, and the opportunity for policy
dialogue between EFIs and ho st economies.  EFIs also discussed
their role in the wake of the Asian fi nancial instability as an
important example of EFI co-operation. We recog nize different
mandates and  approaches in various EFIs, however we expec t a
synergy effect through their co-operation. In view of strengthening
E FI co-operation, we also welcome the protocol agreement which
sets out a framework for promoting technical co-operation and has
been signed by fif teen EFIs and Export Credit Agencies from across
the region.

Supporting the development of credit rating agencies and
strengthening in formation disclosure standards: We encourage the
development of independe nt rating agencies according to
international best practices. In order to assess the status of
existing rating agencies we examined the current ex periences with
credit rating agencies in the region to determine how well 
they are fulfilling their key role in promoting the flow of timely
and a ccurate information across capital markets. The results of work
completed thus far include the identification of some of the
important issues to b e addressed, some of which pertain to the
scope for harmonization and inc reasing the transparency of credit
rating agencies' activities. We are cu rrently examining
experiences in the region regarding credit rating servi ces. We
hope to identify ways to improve rating agencies' ability to prom
ote the flow of timely and accurate information to capital markets.
We al so encourage steps to strengthen information disclosure
standards in the region consistent with international best
practices.

Strengthening clearing and settlement infrastructure: Modern
clearing and settlement systems are integral to capital market
development. The ADB a nd several member economies stand ready to
provide technical assistance t o help strengthen clearing and
settlement systems in economies with less advanced systems. We
welcome the report of the Executive Meeting of East Asian and
Pacific Central Banks (EMEAP) in this area.