, especially in asia, on whether a regional credit rating agency is superior to local credit rating agencies, even if the latter used regional standards for their ratings. in my view, further standardisation of the rating systems of local credit rating agencies at the regional level would be a crucial step in facilitating cross - border comparisons and using the advantages that local credit rating agencies have in terms of reducing the problem of asymmetric information. v. i would now like to turn to two special aspects of developing local currency bond markets which are closely related to ifis, namely the database on local currency bond markets and technical assistance. as regards the database, formulating recommendations for further reforms to develop local currency bond markets in eme depends on the availability of appropriate macroeconomic and financial data. so far the amount of internationally comparable data on domestic bond markets is limited. in particular, there has so far been little internationally comparable data on the maturity and on the instrument structure, and thus on the currency and maturity composition of domestic debt securities in emes. the information on sectoral mismatches is even more limited. there is also little information on derivatives markets in emes. however, more data on these aspects of domestic debt would be a vital factor in making a better assessment of the risk characteristics of domestic debt. in view of the increasing importance of global portfolio flows for real economic development, a more comprehensive and timely coverage of crossboarder activities – especially of non - bank private activities – is also necessary. improving transparency of local currency bonds is not only a matter of macro and microeconomic data. it is also a matter of qualitative data, namely regarding the regulatory and legal framework or the market infrastructure. these qualitative factors can have a significant impact on transaction costs for issuance and investment. empirical studies by the asian development bank have shown that legal protection and standards for governance and transparency are major determinants for deepening bond markets. in my view, improving transparency is not only important for central banks or supervisory authorities but also for competition between financial markets, and thus also for market participants. therefore, we should encourage the bis, the imf and the world bank as well as the national statistical agencies to improve the data basis for local bond markets. but let me add a word of caution. i am also responsible for statistics at the bundesbank, and complaints about the statistical burden are frequently brought to my attention. it is therefore important to balance the need for more and better data with the additional

to set but rather in bringing existing rules and regulations into line with best practices, while giving due regard to a country ’ s specific circumstances. regional cooperation in building market infrastructure can also be an effective way of strengthening clearing and settlement systems. a regional central security depository that acts as a central access point to various domestic markets, providing multi - currency as well as delivery versus payment settlement, would be a possible alternative to a gradual expansion of cross - border links based on existing national systems. finally, in many emes, the securities clearing system is not keeping pace with the payments system in terms of its technological and legal development. improving the link between the payments system and the securities clearing system would be a major step in minimising transaction risks that occur when the buyer of a bond makes his payment days before the delivery of the bond takes place. the ultimate objective must be to accelerate settlement and to develop true delivery - versus - payment systems. it should also be mentioned that many of the existing barriers to an efficient clearing and settlement infrastructure relate to legal and regulatory issues. this underlines the need for close interaction between the private and public sectors. second, the legal framework : property rights and a tax system that is not overly complex or discriminatory are key factors in ensuring that markets are fair, efficient and transparent. a governance structure that enforces contracts and resolves disputes in a credible, speedy and predictable manner is vital for the development of sophisticated financial markets. given the problems of asymmetric information that are inherent in the financial sector, the regulatory framework should also set ambitious standards for auditing and accounting. disclosure rules that ensure the generation and dissemination of reliable information on a timely basis are particularly important. the oecd principles of good governance give appropriate guidance in this regard. let me emphasise that full implementation and enforcement of the corporate governance framework, information disclosure regulations and accounting and auditing standards and practices are as important as the laws and regulations themselves. third, the credit ratings : credit rating agencies play a major role in improving the price discovery process in bond markets, thereby furthering the growth of the corporate bond market. these agencies must be able to compile the necessary information to help investors assess credit risk and pricing spreads of corporate bonds. the rating standards of global agencies currently focus primarily on country risk. but they are less appropriate for evaluating the specific creditworthiness of particular firms in emes, which is a key ingredient for the development of corporate bond markets. there is an ongoing debate