Asian stock markets call for stronger rules

Asian stock markets call for stronger rules

SINGAPORE (AP): Asian stock exchange chiefs meeting at an economic summit Wednesday pledged more transparency and a stronger regulatory framework to rein in increasingly volatile financial markets and hasten recovery.

"There are serious concerns about transparency," said Michael Shepherd, vice chairman of the Australian Stock Exchange. "The perception is that it's risky to invest here."

Other stock exchange leaders agreed, detailing plans to more carefully manage their markets in the interest of fairness and bringing back wary investors.

However, only the chairman of Thailand's Stock Exchange, Amaret Sila-on, was willing to predict a domestic upturn within the next 12 months.

"Strict supervision of brokerage firms can be an effective tool to boost investors' confidence," said Amaret. Because of new regulations and enforcement, "We will be in much better shape coming out of this recession that when this financial turmoil began."

Several central bank governors, meeting in a separate panel, said they expect increased restrictions to be placed on hedge funds, which speculate on currency instability and have been blamed for sudden, disastrous devaluations in Indonesia, Malaysia and Thailand.

"It is no longer relevant to talk about the Asian economic situation. The region continues to be affected by global developments," U.S. Assistant Secretary of State Stanley Roth told reporters. He said many conference participants had agreed on "the urgent necessity for leadership" by the Group of Seven major industrialized nations.

Participants expressed concern about the drift of the world economy and the growing risk of global recession. They called on the Group of Seven to establish a new regime for monitoring, disclosure and regulation of highly leveraged short-term financial flows and other potentially volatile transactions.

Some of those ideas were expressed in a 15-point action plan adopted Tuesday by the economists, officials and businessmen at the East Asia Economic Summit, organized by the World Economic Forum, a private agency based in Switzerland.

"Our aim is an open, orderly and efficient market," said Lee Hon Chiu, chairman of the Stock Exchange of Hong Kong. He said it was time to "establish a sort of international supervision" of markets.