Former vice-premier calls for financial co-op in Asia

BOMBAY - Former Chinese vice-premier Zeng Peiyan on Monday made a four-point proposal on financial cooperation between Asian countries.

Zeng, vice chairman of board of directors of the Boao Forum for Asia, put forward the proposal in his keynote speech at the Asian Financial Cooperation Conference co-organized by the BFA and the Federation of Indian Chambers of Commerce and Industry.

Firstly, currency cooperation should be enhanced, Zeng said, adding that East Asian countries should make the Chiang Mai Initiative Multilateralization more practical and strengthen economic supervision, crisis rescue and prevention.

A cooperative mechanism on Asian currencies with broader coverage can be considered when conditions are mature, Zeng said.

Secondly, Asia should diversify channels to finance infrastructure while the Asian Development Bank continues to play an important role in that aspect, Zeng said.

Bilateral or multilateral infrastructure investment funds can be established to invest in such areas as energy, traffic, telecommunications and urban construction, he said.

Thirdly, Asian countries should improve capital markets, especially developing direct financing to better serve the real economy and increase the efficiency of using capital, Zeng said.

The region should also improve mechanisms for financial transactions and liquidations, enhance connections and communications between capital markets, and prepare to establish regional rating agencies to provide financial services for capital markets, Zeng said.

Fourthly, Asian nations should expand the use of their domestic currencies in the region, Zeng said.

The governments should sign more bilateral agreements in currency swaps and settlements in local currencies and encourage financial institutions to provide convenience and related services, Zeng said.

More than 500 decision-makers, regulators and CEOs of large Asian banks, insurance companies, financial service institutions and other stakeholders attended the meeting that started Monday.

During the two-day meeting under the theme of "Open Asia, Open Finance," participants will discuss such issues as global economic outlook and Asian transformation, financing Asian infrastructure through capital market innovation, currency swaps and exchange rate coordination, Free Trade Area and Asian economic integration.