Under this initiative, four member economies of APEC - China, Thailand, Mexico and the Philippines - have volunteered to receive expert advice through visits from panels of experts. The objective of these visits is to assist the economies in question in identifying potential impediments in their markets and in removing these impediments through specific, achievable and monitored action plans tailored to the individual economy. The programmes under this initiative are making good progress, and, in addition to the panel visits, two policy dialogues have been held to promote understanding and experience-sharing. A second cluster of initiatives, under the ASEAN+3 forum, involves a variety of studies known as the Asian Bond Market Initiative (ABMI) on issues such as new securitised debt instruments, issuance of debt by international financial institutions, regional credit guarantees and enhancement facilities, and the establishment of local and regional credit rating and credit enhancement agencies. The third set of initiatives falls under EMEAP - the Executives’ Meeting of East Asia-Pacific Central Banks - and takes the form of bond funds aimed at channelling a small portion of the very large official reserves held by the Asian economies into the region. The first of these funds - Asian Bond Fund I (ABF1) - was launched in June 2003 and is now fully invested in US dollar-denominated bonds issued by sovereign and quasi-sovereign issuers in the EMEAP economies. The EMEAP Central Banks are currently working on ABF2, which will invest in local currency-denominated Asian bonds.

Both initiatives are aimed at promoting the development of index bond funds in the regional markets and, at the same time, enhancing both domestic and regional bond market infrastructure. This is a very concrete initiative, involving the allocation of funds by a considerable number of central banks. These three sets of initiatives use differing approaches and a variety of tools. But they have common aims. One important aim is to identify - through individual studies, experience-sharing, and the practice of fund management - where obstacles exist and how best standards and practices can be harmonised to facilitate cross-border financial transactions within the region. A separate, but parallel  BIS Review 40/2004  3  consideration is the development of financial infrastructure. A number of studies have been carried out to explore the feasibility and desirability of establishing region-wide infrastructure, such as a regional rating agency and regional settlement and payment systems. Apart from the many technical complexities, any proposals for infrastructure on a regional dimension would require thorough discussion among different jurisdictions and rigorous assessment of business viability and impact on the market. Long planning time would therefore be expected before any conceptual proposal could be put into practice. Effective financial infrastructure across the region is a precondition for debt market development within the region. Without it, all of the other initiatives I have described would be about as useful as buying aeroplanes without having the airports in which to land them.