May 03,2010
Asian Finance Chiefs Unveil $700 Million Bond Fund
“A group of Asian finance ministers have agreed to set up a $700 million fund to encourage the issuance of local-currency-denominated bonds by giving guarantees.
The 10 finance chiefs of the Association of Southeast Asian Nations and the finance ministers of Japan, China and South Korea, collectively known as Asean plus three, unveiled the plan after a meeting in [Tashkent]. [The Wall Street Journal]
The 13 countries had already agreed in principle to set up the $700 million fund, to which the ADB will also contribute, to provide credit guarantees to corporate bonds being issued in local markets in local currencies.
"The main objective of the CGIF is to support the issuance of corporate bonds in our region, and thus contribute to the development of regional bond markets," the statement read, using the acronym for the Credit Guarantee and Investment Facility…
Japan and China will contribute $200 million each to the facility while South Korea will put in $100 million. The ADB is set to chip in $130 million and the Association of Southeast Asian Nations (ASEAN) members will together take up the remaining $70 million.
The credit guarantee fund is part of a broader Asian Bond Markets Initiative launched in 2003 to avert a repeat of the 1997-98 Asian Financial Crisis, when the region suffered from its reliance on short-term dollar-denominated financing. [ABC News]
Finance ministers from the 10 ASEAN members, China, Japan and South Korea also expressed their concern that there was a risk of rising asset prices and overall inflation as a result of the buildup in liquidity around the world. [Reuters]
Asian Finance Chiefs Unveil $700 Million Bond Fund
“A group of Asian finance ministers have agreed to set up a $700 million fund to encourage the issuance of local-currency-denominated bonds by giving guarantees.
The 10 finance chiefs of the Association of Southeast Asian Nations and the finance ministers of Japan, China and South Korea, collectively known as Asean plus three, unveiled the plan after a meeting in [Tashkent]. [The Wall Street Journal]
The 13 countries had already agreed in principle to set up the $700 million fund, to which the ADB will also contribute, to provide credit guarantees to corporate bonds being issued in local markets in local currencies.
"The main objective of the CGIF is to support the issuance of corporate bonds in our region, and thus contribute to the development of regional bond markets," the statement read, using the acronym for the Credit Guarantee and Investment Facility…
Japan and China will contribute $200 million each to the facility while South Korea will put in $100 million. The ADB is set to chip in $130 million and the Association of Southeast Asian Nations (ASEAN) members will together take up the remaining $70 million.
The credit guarantee fund is part of a broader Asian Bond Markets Initiative launched in 2003 to avert a repeat of the 1997-98 Asian Financial Crisis, when the region suffered from its reliance on short-term dollar-denominated financing. [ABC News]
Finance ministers from the 10 ASEAN members, China, Japan and South Korea also expressed their concern that there was a risk of rising asset prices and overall inflation as a result of the buildup in liquidity around the world. [Reuters]