Committee on Finance and Banking
THE FIFTH AND SIXTH Meetings of the Committee
on Finance and Banking (COFAB) were held
in Bangkok on 3-4 July and 20 October 1980
respectively. The Seventh COFAB Meeting was
held in Bali on 16-17 March 1981. The following
are some of the main developments :
ASEAN Bankers Acceptance
The Tenth AEM Meeting, in reviewing the
Reports of the Fifth and Sixth Meeting of
COFAB, agreed in principle to the implementation
of this proposal subject to the resolution of
certain issues concerning eligibility criteria for
ABAs and the acceptability of the role, and the
extent thereof, of Central Banks and Monetary
Authorities as lenders of last resort.
An Expert Group Meeting of ASEAN Central
Banks and Monetary Authorities was convened in
Bangkok in December 1980 and recommended
the following:
(i) While Government assistance is necessary to
get the ABA scheme off the ground, such assistance
should not be of a permanent nature;
(ii) As buyer-of-last-resort, Central Banks and
Monetary Authorities should among others,
(a) limit the issue of ABAs only to authorized
banks,
(b) set a limit on the volume of rediscountable ABAS, and
(c) rediscount only ABAs with not more
than 90 remaining days to maturity.
(iii) The ASEAN Banking Council should be
requested to develop a concrete framework for
a viable secondary market for ABAs.
Certain issues, however, remain unsetteled.
First is the question of the extent to which the
specific rate to be applied for rediscounting
should be penal on concessionary. There is also
the question of whether the ABA scheme should
be export as well as import based or just import
based.
ASEAN EXIM Bank
The Tenth AEM Meeting agreed that given the
adequacy of present existing export credit facilities,
consideration of the setting up of an
ASEAN Export-Import Bank be deferred.
Financing of ASEAN Industrial Project
On the financing of AlPs the Seventh COFAB
Meeting agreed that Third Country Loans may be
given direct to the Project Company if the host
Governments undertake to guarantee such loans.
Guarantees should not, however, be subject to a
guarantee fee and should be unconditional in the
sense that the host Governments shall be jointly
responsible with the Project Company for the
repayment of the loan.
Avoidance of Double Taxation
Some ASEAN member countries have concluded
bilateral agreement while others are in the
process of negotiations.
ASEAN Finance Cooperation
The ASEAN Economic Ministers at their Tenth
Meeting, October 1981 in Bangkok, agreed to
give encouragement towards the establishment of
ASEAN Finance Cooperation of the ASEAN
Banking Council.
For more information, please refer to the project details
