Two policy dialogues will be held in early 2004, one on financial transparency in the financial sector (co-chaired by Chile and New Zealand) and another on deposit insurance (chaired by Canada). Both policy dialogues will be held in Kuala Lumpur, Malaysia.

b) Financial Regulators Training Initiative (the ADB and the United States)

In the 5 years of its existence, this initiative has made good progress in achieving its objectives of strengthening the content and management of economy-level training programs and developing regional programs for junior and mid-level financial regulators. The initiative has trained about 1,200 participants from the APEC economies, in 20 regional and 11 economy-level courses. We support the continuation of this initiative for another year to facilitate the transfer of training programs and products developed under the initiative to regional and economy-level training institutions, and to provide additional training courses at the regional level to further help build a critical mass of potential trainers. We also support an enhancement of the initiative’s advisory group structure by introducing rotating chairs from member countries. In a related effort, Chinese Taipei will host a Basel II-related seminar in fall 2003.

The Managing Regulatory Change in Life Insurance and Pensions (MRC) model of public/private partnership and sponsorship aims to strengthen regulatory standards in the life insurance and private pensions sector which has proved to be highly effective. The MRC program is in its third year with one training program remaining to be delivered, scheduled for 8-20 September 2003. The last training program was held in Melbourne, Australia, on 10-21 March 2003. Twenty-six middle and senior life insurance and pension regulators from 9 APEC economies attended the program.

The Pathfinder is a peer review process that will encourage greater participation in the Reports on the Observance of Standards and Codes and better reporting on members’ achievements and plans for corporate governance reforms. The peer review process will not rank economies, but will note the completion of the work reported in the questionnaires, sorting out some of the key issues that arise. Australia is planning to hold a core group meeting for the members in early 2004 to discuss the draft report. It is anticipated that the final report will be ready for the Finance Ministers’ Meeting in 2004.

This initiative intends to review the effectiveness of insolvency law pertaining to asset resolutions and corporate restructuring. The 2nd Forum for Asian Insolvency Reform was held in Bangkok on 16-17 December 2002 to discuss the topic of asset resolutions and the role of the Resolution Trust Corporations and the implementation of corporate restructuring. The seminar also looked at techniques, development, benefits, and costs of informal workouts. Our 3rd Forum, on Asian Insolvency Reform, will be hosted by the OECD on 10-11 November 2003, in Seoul, Korea. Furthermore, the Asian Development Bank will host the meeting on Promoting Regional Cooperation in the Development of Insolvency Reform in September-October 2003 in Manila, the Philippines, on 3 areas, namely, cross-border insolvency, informal workouts, and secured transactions in insolvency law regimes.

The APEC Privatization Forum (PF) is a venue to exchange views on privatization’s best practices in order to unleash new potentials among the APEC economies. The APEC PF met on 16 June 2003 in Bangkok, Thailand, to discuss the establishment of a "regulators’ network" for the region. The meeting noted the inaugural regional roundtable held in Hanoi, Vietnam, in 2002. The roundtable introduced the concept of Private Participation in Infrastructure (PPI) to a range of Southeast Asian economies. The 5th APEC PF and 2nd regional roundtable will be co-hosted by Chile and Peru in early 2004.

Alternative remittance systems (ARS), which allow for informal transfers of funds outside the formal financial system, have a development impact and can be vulnerable to abuses. This APEC initiative examines the economic and institutional factors influencing the use of alternative remittance systems. At the Working Group’s request after the Experts Group meeting in Singapore in March 2003, the World Bank, with input from the Asian Development Bank and the IMF, drafted a report that creates a framework for estimating the magnitude of remittances flows, discusses incentives for using informal systems, and examines the role of the private financial institutions in the provision of remittance services that are compliant with international anti-money laundering/combating of terrorist financing standards. The report concluded with policy recommendations on how formal financial systems can be strengthened to provide more attractive and accessible remittance services. The WG proposed holding a policy dialogue next year to further engage senior APEC policymakers, the private sector, and the international financial institutions on strengthening remittances services in the formal sector to be more accessible to its users. The WG also urged the international financial institutions to continue their valuable work on remittances.

The APEC Finance and Development Program (AFDP) aims to strengthen capacity building for APEC members in the areas related to finance and development through the conduct of workshops, research projects and annual fora. Activities in 2003 will include holding the annual forum and two workshops as well as undertaking the ongoing research project. The annual forum will be held in Shanghai, China, in October. Two workshops will be held on SME financing, co-sponsored by the World Bank, Korea, and Thailand in Seoul, Korea, in November and on government bond market development co-sponsored by the World Bank and Indonesia, to be held in Bali, Indonesia, in December.

The Think Tank aims to facilitate the building of relationships and networks among the future financial and economic leaders in APEC. Australia hosted the 3rd Future Economic Leaders’ Think Tank in Sydney, 11-14 June 2003. Twenty-six participants from 14 APEC economies attended. The topic for this year was "Cross-Border Financial Transactions: Cooperation for Effective Surveillance Systems and Good Governance." This was not a formal advisory group, but it will produce a report for Finance Ministers. Australia encouraged other economies to host the Think Tank.

The objective of this action-oriented initiative is to look mainly into securitization and credit guarantee markets within the APEC economies in order to identify impediments and propose appropriate solutions to remove them. It involves (i) holding high-level policy dialogues to discuss and exchange views on the use of securitization and credit guarantees at the domestic and regional levels and (ii) providing experience-sharing programs in which expert panels provide detailed action plan in identifying and removing impediments to the development of securitization and credit guarantee markets.

The first policy dialogue was held in April 2003 in Seoul, Korea. Regarding the experience-sharing programs, so far, ten APEC member economies have participated, either by sponsoring experts or seeking expert advice on how to remove their market impediments. Panel visits to Thailand and China were launched in June and July 2003, respectively. Action plans have been submitted by expert panels to both Thailand and China for consideration.