2010-04-08
ASEAN+3 to establish Credit Guarantee Investment Facility by May
NHA TRANG, Vietnam, April 7 (PNA/Xinhua) -- ASEAN+3 financial officials agreed here on Wednesday to establish a fund called Credit Guarantee Investment Facility (CGIF) by May, marking a big step in developing Asian bond market.
Finance and central bank deputies from the 10-member ASEAN, China, Japan and South Korea have "agreed on key elements of the CGIF formation and expressed strong determination to sign the agreement on its establishment ahead of the ASEAN+3 Finance Ministers' Meeting slated for next May," according to a press release here.
CGIF will have an initial capital of US$ 700 million. It will be a trust fund managed by the Asian Development Bank. The objective of CGIF is to support the issuance of local currency-denominated corporate bond in Asia, so as to contribute to Asian economic development and prosperity.
Following the world financial crisis, East Asia has stepped up efforts to develop Asian bond market. Particularly, financial officials of ASEAN+3 countries focused on the completion of the negotiation on the establishment of the CGIF to give financial support to regional companies in the capital mobilization through the issuance of bonds dominated in original currency.
Major issues regarding the establishment of CGIF such as business scope, leverage ratio and country limit are discussed at the two-day ASEAN+3 Finance and Central Bank Deputies Meeting that concluded on Wednesday.
Experts hailed the CGIF establishment as they believe the move will also diversify the investment channels for the large amount of foreign currency that East Asian countries are holding.
Figures from the International Monetary Fund showed that the foreign currency reserve of ASEAN+3 countries accounts for about half of the world's total.
Currently, East Asian are deepening financial cooperation on two fronts, the Chiang Mai Initiative Multilateralization (CMIM) and Asian Bond Market Initiatives.
Chiang Mai Initiative Multilateralization (CMIM) is a currency swap arrangement to help countries tackle a possible foreign capital flow shortage. Last month, the agreement took effect.
The ASEAN+3 countries have agreed to inject US$ 120 billion into the regional reserve pool in case of a financial crisis.
These outcomes of East Asian financial cooperation will contribute to the regional economic stability and sustainable development, said experts.
Financial officials at the meeting also discussed future directions on ASEAN+3 financial cooperation to give more momentum to a more effective regional cooperation.
The ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
NHA TRANG, Vietnam, April 7 (PNA/Xinhua) -- ASEAN+3 financial officials agreed here on Wednesday to establish a fund called Credit Guarantee Investment Facility (CGIF) by May, marking a big step in developing Asian bond market.
Finance and central bank deputies from the 10-member ASEAN, China, Japan and South Korea have "agreed on key elements of the CGIF formation and expressed strong determination to sign the agreement on its establishment ahead of the ASEAN+3 Finance Ministers' Meeting slated for next May," according to a press release here.
CGIF will have an initial capital of US$ 700 million. It will be a trust fund managed by the Asian Development Bank. The objective of CGIF is to support the issuance of local currency-denominated corporate bond in Asia, so as to contribute to Asian economic development and prosperity.
Following the world financial crisis, East Asia has stepped up efforts to develop Asian bond market. Particularly, financial officials of ASEAN+3 countries focused on the completion of the negotiation on the establishment of the CGIF to give financial support to regional companies in the capital mobilization through the issuance of bonds dominated in original currency.
Major issues regarding the establishment of CGIF such as business scope, leverage ratio and country limit are discussed at the two-day ASEAN+3 Finance and Central Bank Deputies Meeting that concluded on Wednesday.
Experts hailed the CGIF establishment as they believe the move will also diversify the investment channels for the large amount of foreign currency that East Asian countries are holding.
Figures from the International Monetary Fund showed that the foreign currency reserve of ASEAN+3 countries accounts for about half of the world's total.
Currently, East Asian are deepening financial cooperation on two fronts, the Chiang Mai Initiative Multilateralization (CMIM) and Asian Bond Market Initiatives.
Chiang Mai Initiative Multilateralization (CMIM) is a currency swap arrangement to help countries tackle a possible foreign capital flow shortage. Last month, the agreement took effect.
The ASEAN+3 countries have agreed to inject US$ 120 billion into the regional reserve pool in case of a financial crisis.
These outcomes of East Asian financial cooperation will contribute to the regional economic stability and sustainable development, said experts.
Financial officials at the meeting also discussed future directions on ASEAN+3 financial cooperation to give more momentum to a more effective regional cooperation.
The ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
