The Asian Development Bank (ADB) said Wednesday it will study ways to facilitate cross-border trading and investment in Asian government and corporate bonds in a year-long research.
ADB said it will study the role of private placements in integrating the region's relatively small corporate bond markets and eye the strengthening of the region's self regulatory bond organizations.
If necessary, the establishment of Asia's counterpart of the International Capital Market Association in Europe will be pushed forward, the bank said.
Bond markets in Asia have expanded rapidly in recent years. Between the end of 2007 and the end of 2008, the total outstanding bonds in ASEAN member countries, the Chinese mainland, China's Hong Kong, and South Korea grew 14.9 percent to 3.7 trillion U.S. dollars, ADB said.
However, regional cross-border issuance and investment is low with ASEAN+3 countries allocating only 2 percent of their bond investment to paper denominated in other regional currencies, it added.
Last December, ADB started a 12-month study on bond settlement and clearing in order to improve the efficiency of cross-border arrangements now in place.
That study will also consider whether a regional settlement body would be preferable.
"Breaking down the legal, policy and other barriers between the various bond markets and harmonizing standards is key to creating a deep and active regional market that can support economic growth in Asia," says Avonechith Siackhachanh, advisor in ADB's Office of Regional Economic Integration.
(Xinhua News Agency February 18, 2009)
