FOREWORD

Summary

The development of local currency bond markets in the region and of cross-border investment and issuance in these markets has become a major objective of governments in the wake of the Asian financial crisis. Governments acknowledge the key role of private sector market participants in the emergence of deep and liquid markets, and the contributions they can provide to the design and creation of such markets.

In response to the call of APEC Finance Ministers for private sector inputs to assist in efforts to develop bond markets in the region, the APEC Business Advisory Council (ABAC) and the Pacific Economic Cooperation Council (PECC) convened a private sector-led conference in May 2004 in Taipei. In that conference, participants identified necessary conditions to enable expanded private sector investment and issuance, both domestic and cross-border, in the region's bond markets.

In 2005, ABAC and PECC collaborated with the Asian Development Bank Institute (ADBI) to convene a follow-up conference in Tokyo. The conference attracted the participation of 124 key public and private sector representatives who are actively involved in the development of the region's bond markets. This report summarizes the content of the presentations and discussions during this conference.

This conference sought to make an assessment of the extent to which individual economies are able to provide an enabling environment for private sector activity in the region's bond markets. It also sought to define a regional cooperation agenda, based on public-private sector partnership, to achieve progress towards providing such an enabling environment in individual economies throughout the region. As can be gleaned from this report, the conference succeeded in achieving both objectives.

The co-organizing institutions acknowledge the invaluable support of the Japanese Ministry of Finance, the Financial Services Agency, the Bank of Japan, and the Inter-American Development Bank; the effective collaboration of the Japanese committees of ABAC and PECC and of the ADBI and the ADB; and the active participation of key officials and regulators as well as private sector market players and experts from throughout the region.