The US-ASEAN Business Council’s Financial Services Committee consists of some of the leading financial services institutions and markets participants in the world. The committee is currently chaired by ACE Group and Citi and co-vice chaired by AIG and Visa. The committee’s members include: MetLife, MasterCard, American Express, General Electric, Moody’s, Standard & Poor’s, KKR, General Atlantic, JPMorgan Chase and Bank of America. Each year, the Council works directly with our members to create initiatives and activities to support their policy advocacy agendas and business development efforts in the region. A short list describing some of the activities and partnerships with ASEAN entities is below. As you will see, the main themes of our activities have involved: Capacity building; public-private dialogues to support policy formulation; and supporting the execution of ASEAN initiatives. Our primary partners over the years have been: The ASEAN Finance Ministers, the SEACEN organization of central banks, the ASEAN Working Committee on Capital Markets Development chaired by the Monetary Authority of Singapore (MAS) and the ASEAN Capital Markets Forum (ACMF). Below are highlights from our work with these partners.
The US-ASEAN Business Council in Financial Services in ASEAN
The Council has been a consistent supporter of ASEAN’s regional economic integration agenda. Its engagement efforts are now focused on assisting regional policymakers create a post-2015 capital markets integration agenda for the region as the ten ASEAN countries prepare for the creation of the ASEAN Economic Community. At the forefront of many of ASEAN’s integration efforts are the region’s ten Finance Ministers. The Council’s Financial Services Committee has established an impressive record of “engagement” with financial sector policymakers in the region including Finance Ministers and Central Bank Governors. In addition to regular dialogues and briefings in the US and the region with key financial leaders from ASEAN’s major economies, the Council’s Financial Services Committee has also had the honor of formally participating in the past 14 annual ASEAN Finance Ministers Meeting (AFMM).
Since 2001, the Council has had the honor of sending delegations of executives from US multinational corporations to attend the annual ASEAN Finance Ministers Meeting (AFMM). Up until 2005, our delegations consisted of executives representing companies operating in a wide variety of sectors. As the focus of these dialogues have increased in depth and complexity each year, our delegations have consisted of executives representing companies exclusively from the banking and financial services sectors. Over the years, we’ve used our annual dialogue with the ten finance ministers at the AFMM to engage on a wide range of policy issues and initiatives related to ASEAN’s efforts in: Developing regional capital markets; Integrating financial services industries; and Promoting ASEAN as an asset class to the international investment community. From the Ministers' point of view, our participation produced value in the form of: A source of ideas for regional integration & capital market development initiatives, feedback from market participants on current/previous initiatives, a source of information/analyses on economic and & financial developments in the US and international markets, and forming partnerships to support the ministers financial road shows to the US. From our vantage point, the annual meetings have produced value in the form of: Understanding the priorities and objectives of the Ministers, identifying public-private partnership opportunities to support regional initiatives; sharing proposals for supporting the formation of regional capital markets and financial services integration, addressing constraints on the participation of foreign financial services companies in regional markets, and facilitating the establishment of formal linkages with other ASEAN regional financial sector entities.
Success Stories in ASEAN
Some specific examples of interventions, proposals and contributions our delegations have made at the annual AFMM’s include:
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At the 2014 ASEAN Finance Ministers’ Meeting in Nay Pyi Taw, Myanmar, our discussion focused on the following: the need to provide natural catastrophe risk financing to an under-insured region susceptible to natural disasters in order to create uninterrupted economic growth, the creation of an agenda to promote continuous regional financial integration and capital markets development following the December 2015 implementation of the ASEAN Economic Community, and enhancing financial inclusion initiatives to support broad-based economic growth. All of these discussion topics were undertaken in the spirit of Council members and the broader private-sector financial services community working cooperatively with ASEAN policymakers to create sustainable economic growth and development within and between their respective countries. During the delegation’s working luncheon with the ten Finance Ministers and throughout its bilateral meetings before that luncheon, Financial Services Committee members stressed the need to policymakers for predictability in policymaking, impartiality between domestic and global firms operating in ASEAN, and regional policy compatibility as the ASEAN Economic Community takes shape. The delegation and policymakers also discussed at length the importance of unimpeded cross-border data flows to regional financial services development, improved standards in corporate governance and continuing efforts to enhance financial literacy throughout ASEAN.
- In 2008, our discussion focused on the following: Sharing perspectives on the impact of the US financial crisis and global recession on ASEAN’s real economy (Coupling vs De-coupling), offering private sector feedback on ASEAN’s policy responses to the global economic crisis, and identifying “niche” opportunities for ASEAN to strengthening its positioning as an “asset class” for global investors. We also tabled ideas for a template with achievable “benchmarks” under an ASEAN Financial Services Integration Road Map including included specific recommendations on: Regulation harmonization, ratings alignment, listing rules and regulations, market infrastructure, policy reforms, exchange rate alignment, tax policy, models for linking the stock exchange linkages, and infrastructure needs to facilitate cross border market access. In 2009, the ASEAN Capital Markets Forum’s Implementation Plan for linking ASEAN’s six largest stock exchanges and creating an ASEAN Board contained many of our proposals and was endorsed by the ten ASEAN Finance Ministers. In 2009, Standard and Poor’s also successfully also introduced the ASEAN regional Ratings Scale product.
- In 2007, our discussion focused on the following: Sharing ideas on how ASEAN could create structures to promote longer duration regional assets/instruments, including a regional fund or long term bonds for infrastructure investment; policy suggestions for making regional capital markets and financial services industries more attractive to global investors, and providing feedback/comments for amending ASEAN’s regional investment agreements which make up the ASEAN investment Area(AIA). This year a $1 billion Infrastructure Investment Fund will be launched to fund national and cross border infrastructure projects in ASEAN
- In 2006, our discussion focused on the following: Recommendations for expanding the role of financial services industries as engines of GDP growth by creating “benchmarks” for measuring ASEAN’s progress in strengthening local capital markets, and policy reforms and investments for enhancing the global competitiveness of financial services industries in ASEAN. Delegation members also shared their ideas and company specific efforts at introducing new products and services to support SME financing and consumer financial literacy in various ASEAN markets. This year, Malaysia’s Central Bank launched a Financial Inclusion Program to promote best practices and opportunities for expanding financial services to SME’s and least banked communities.