Asian central banks agree to reforms

Asian central banks agree to reforms

HONG KONG (Reuters): Asia's central bankers on Friday agreed on the need to pursue appropriate macroeconomic policies and continue reform, and welcomed global efforts to strengthen the international financial system.

But the 11 member economies of the Executives' Meeting of East Asia-Pacific Central Banks (EMEAP) came away from a one-day conference without any concrete proposals on ways to shore up international financial markets to help avert future turmoil.

"We certainly came to a consensus as to the need for greater disclosure and greater transparency on private sector capital fund flows. As to how we could achieve that is another matter," said Joseph Yam, chief executive of the Hong Kong Monetary Authority (HKMA) and chairman of the meeting.

Yam said there would be further discussion of this issue within the Financial Stability Forum (FSF), an informal body set up earlier this year as an international crisis watchdog.

The FSF, initiated by the Group of Seven major industrialized countries, has invited Hong Kong, Singapore, Australia and the Netherlands, as major financial centers, to its next meeting on Sept. 15 in Paris.

Yam said EMEAP welcomed the establishment of the FSF and added that he hoped Asia's participation in the forum would be sustained.

EMEAP comprises central banks and monetary authorities from Australia, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore and Thailand.

Friday's meeting was the fourth for the group and preceded a board meeting of the Bank for International Settlements to be held in Shanghai on Monday.

On Saturday morning, BIS General Manager Andrew Crockett will meet with EMEAP in Hong Kong to discuss the activities of the FSF, which he chairs.

Yam said EMEAP "spent a lot of time discussing the sustainability of a recovery in Japan" though the members did not directly address the value of the yen.

"We recognized, or at least I myself recognized, there is a continued need for continued fiscal stimulus (in Japan) and continued reform of the financial system," he said.

The outlook for the United States also was on the agenda.

"Whether or not the information-technology-induced productivity growth in the U.S. would sustain the economic growth in the U.S. is something we are all very keenly interested in," Yam told reporters in a briefing.

Yam said the group noted encouraging signs of economic recovery and stability returning to financial markets in Asia, but agreed on the need to pursue appropriate macroeconomic policies and continue structural reforms for the recovery to be sustainable.

"Governors also called for a supportive international environment characterized by continued and steady growth of industrialized economies and stability of the major currencies and financial markets," EMEAP said in a statement.

But the group did not discuss currency levels, Yam said.

The members also reaffirmed their commitment to promote cooperation and advances in the different areas of central banking functions and also vowed to work together on Y2K issues. The next EMEAP meeting would be held in South Korea on July 7, 2000, the group said.