Asia-Pacific finance ministers to focus on turmoil, G15 opts out

Asia-Pacific finance ministers to focus on turmoil, G15 opts out

KUALA LUMPUR (AFP): Asia-Pacific finance ministers plan to discuss steps to make currency trading more transparent and develop prudential and disclosure standards for financial markets during their two-day meeting next week, a senior Malaysian official said Thursday.

Clifford Herbert, secretary-general of the finance ministry, said the meetings of 15 ministers and their deputies would also discuss regional surveillance and financing arrangements, including a specific fund for ASEAN.

In a related development, Clifford said finance ministers from the Group of Fifteen (G15) developing nations would not attend next week's meeting as announced earlier this month at the end of their annual summit in Malaysia.

Instead, the G15 ministers will meet "early next year" as next week's schedule clashes with a meeting of Latin American finance ministers.

Members of the G15 "asked us to consider whether we could defer it," Herbert told a news conference. "We didn't want to clash."

Herbert said finance ministers from Australia, Myanmar, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and Thailand would attend the two-day meeting from next Monday, along with vice ministers from Brunei, China, Japan, South Korea, Laos, the United States and Vietnam.

Deputy governors from the Reserve Bank of Australia, The People's Bank of China and the Hong Kong Monetary Authority will also attend, as well as senior officials from central banks of Myanmar, Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore and Vietnam, another official said.

"These meetings will enhance the credibility of ongoing efforts to restore stability and confidence in the region," Herbert said, referring to the recent collapse of several Asian currencies and tens of billions of dollars in IMF-led bailout facilities for Thailand, Indonesia and possibly South Korea.

Herbert said the meetings, which also include International Monetary Fund managing director Michel Camdessus, would "discuss the current economic situation faced by member countries and exchange views on the causes and extent of the currency crisis and policy responses to restore stability."

Among major issues to be discussed are the importance of "enhancing transparency in currency trading" and the need for "developing prudential and disclosure standards in financial markets," Herbert said.

Also on the agenda are regional initiatives towards establishing a "regional surveillance and financing arrangement," he added.

Camdessus will meanwhile "report on the progress of the IMF study on hedge funds and their role in market dynamics," he said, adding that ASEAN finance ministers would hold bilateral talks with Japan and the United States.

"Japan is expected to brief the meeting on the Japanese economic situation and present their perspectives on efforts to restore stability in the region.

"Similarly, the United States will also present their views on the current situation and the role the United States can play to restore stability."

Herbert said ASEAN finance ministers would also discuss the idea of a specific fund for the Association of Southeast Asian Nations.

"We haven't discussed the modalities yet," he said, adding that this was "something ministers have to decide among themselves."

But the ASEAN fund "won't be very large" and will be "just for confidence building," he said. "It's an ASEAN initiative."

Clifford said the fund would be "different" from an Asian supplementary financing facility involving the IMF. "The Asian supplementary financing facility is not a fund but a commitment," he said.

The facility proposed in Manila effectively killed off proposals by Japan and some ASEAN countries including Malaysia for an Asia-wide fund not necessarily linked to the IMF to help bail out distressed economies.

Known as a "cooperative financing arrangement", the facility is designed to be used in exceptional circumstances to augment a country's reserves, supplementing traditional IMF instruments and involving larger amounts to be lent at rates closer to those prevailing in the market.