I. ASEAN Finance Cooperation

At the 50th Anniversary, ASEAN has been on a long journey of changes and adjustment. Recovered from the Asian Financial Crisis in 1997-98, ASEAN has implemented vast monetary and fiscal policies and strengthened the economies through various reforms; thus, rebounded to buoyant status. ASEAN has strived and regained domestic and international confidence while revitalized with vigorous growth and financial stability. ASEAN has become one of the fastest growth centers with an average growth of 5.6 percent/ annum in the past decade and placed itself among the most attractive investment destinations in the world.

At the 14th ASEAN Finance Ministers Meeting (AFMM) in Nha Trang, Viet Nam, in April 2010, the Ministers committed themselves to further promote financial stability in the region. Despite the region’s dynamism, robust financial system and strong economic frameworks, the Ministers agreed to remain vigilant against the uncertainties in major advanced economies and committed to maintain growth momentum in order to achieve a stable, efficient and resilient financial system in the region. The Ministers also reaffirmed their commitment to implement policies that favour strong and sustainable growth as well as promote domestic demand, boost productivity and enhance the integration of ASEAN’s markets.

At the 19th AFMM in Kuala Lumpur, Malaysia, the ASEAN Finance Ministers and the Central Bank Governors convened the first (1st) joint meeting of the ASEAN Finance Ministers and Central Bank Governors under the Malaysian Chairmanship. The Ministers and the Governors remained committed to achieve the goals of the ASEAN Economic Community (AEC) in 2015 and supported the activities under the Roadmap for Monetary and Financial Integration of ASEAN (RIA-FIN). The Ministers and the Governors also affirmed the commitment to develop plans for post 2015 ASEAN Financial Integration.

ASEAN Surveillance Process (ASP)

  • The ASP started in 1999 as a mechanism for peer review and exchange of views among the senior officials (central bank and finance) and Finance Ministers on recent economic developments and policy issues in ASEAN. Since then, it has evolved into an important mechanism in ASEAN on regional economic monitoring and surveillance.
  • At the Special AFMM in Tashkent, Uzbekistan, in May 2010, the Ministers endorsed the Terms of Reference and initial budget for the establishment of the high-level finance and macroeconomic surveillance office at ASEC, called the Macroeconomic and Finance Surveillance Office (MFSO). The MFSO started its operation in June 2010 as part of the AEC Department at ASEC, headed by a Director/Chief Economist. Taking into account the revised mandate of the MFSO, during the 15th AFMM in Bali, Indonesia on 8 April 2011, the MFSO was renamed as the ASEAN Integration Monitoring Office (AIMO).
  • The new organisational structure of the ASEC was endorsed by the Committee of the Permanent Representatives (CPR) and subsequently submitted to and approved by/during the 17th Meeting of the ASEAN Community Council (ACC), held on 20 November 2015. The new structure came into effect on 1 January 2016 where the AIMO has been regularised as one of the three directorates in the AEC Department, called the “ASEAN Integration Monitoring Directorate” (AIMD)

A. Roadmap for Monetary and Financial Integration of ASEAN (RIA-Fin)

Endorsed by the AFMM in Manila in 2003, RIA-Fin consists of steps, timelines and indicators of activities in three areas: (i) Capital Account Liberalisation, (ii) Capital Market Development and (iii) Financial Services Liberalisation, with the ultimate goal of greater economic integration in ASEAN by 2015.

  • Capital Account Liberalisation (CAL) aims to achieve freer flow of capital among AMS, which will aid in an efficient allocation of savings in ASEAN to facilitate economic growth and welfare, by gradually removing restrictions in the current account, foreign direct investments, portfolio investments and other flows. The progress of CAL is monitored through the ASEAN CAL Heat Map. The Policy Dialogue Process on capital flows and safeguard mechanisms for CAL allow AMS to monitor capital flow trends and exchange experiences on capital flow management, assisting AMS in policy formulation to help maintain financial stability in the region.
  • Capital Market Development (CMD) aims to build capacity and lay infrastructure for development of ASEAN capital markets, to achieve capital market integration and facilitate greater trade and investments. Key achievements to date include: enhancement of the ASEAN Bond Market Development Scorecard to monitor bond market developments and regulatory regimes; provision by AMS of bond market benchmarks at regular intervals, post-trade bond prices, and retail investor access to purchase government bonds; and adoption by some AMS of the ASEAN Debt Securities Standards.
  • Financial Services Liberalisation (FSL) through the progressive removal of restrictions to the provision of financial services by ASEAN financial service suppliers to domestic markets in other ASEAN countries helps enhance intra-regional trade and investment. Liberalisation of financial services sector has been carried out through rounds of the ASEAN Framework Agreement on Services (AFAS) negotiations, which enshrines the progressive commitments by AMS. As of 2016, seven rounds of negotiations have been completed, with a shorter FSL cycle of two years starting in the 7th package. The ASEAN Trade in Services Framework Agreement on Services (ATISA) is currently being discussed by ASEAN and will soon replace the AFAS. The ATISA will strengthen the platform and legal framework to realise the free flow of services, including financial services. For financial services specifically, the ATISA will update the existing agreement by granting equal, if not more liberal commitments than what have been granted in ASEAN Plus Free Trade Agreements (FTAs) and incorporating elements which are present in existing ASEAN Plus FTAs.

In linking ASEAN to the global economy, the WC-FSL continues to monitor developments and participate in the negotiations of financial services obligations in the ASEAN Plus FTAs, including the Regional Economic Comprehensive Partnership (RCEP) through the RCEP Sub-Working Group on Financial Services (SWG-FIN).

B. Other Finance Cooperation Initiatives

  • ASEAN Capital Markets Forum (ACMF), which was established in 2004, has led and completed several initiatives to develop a deep, liquid and integrated capital market in the region. The ASEAN Trading Link (ATL), which currently connects the exchanges in Malaysia, Singapore and Thailand, provides investors with easier and seamless access into ASEAN markets from one single access point. The ASEAN Corporate Governance Scorecard aims to raise corporate governance standards and practices, showcase and enhance the visibility of well-governed ASEAN publicly listed companies (PLCs), and promote ASEAN as an international asset class. The ATL, together with the Scorecard, is expected to increase the visibility of ASEAN PLCs in the global financial market. AMS are currently working on expanding the number of signatories of the MoU on the ASEAN Collective Investment Schemes (CIS) Framework which allows fund managers to offer CIS to retail investors under a streamlined authorisation process.
  • ASEAN Banking Integration Framework (ABIF) was established to facilitate effective operationalisation of the banking integration process in ASEAN as well as to formulate initiatives that will promote improvement in banking regulatory frameworks and cooperation and financial stability arrangement for regional financial integration. The major initiative is the bilateral reciprocal arrangements under the ABIF for Qualified ASEAN Banks (QABs) to provide QABs with greater market access and operational flexibilities similar to that accorded to indigenous banks in the host countries, as may be mutually agreed between a Host Country and a Home Country.
  • Payment and Settlement Systems (PSS) aims for an ASEAN payment system that is safe, innovative, competitive, efficient, and more interconnected through adoption of international standards, bilateral/ multilateral payment system linkages as well as developing settlement infrastructure for cross-border trade, remittance, retails payment systems and capital markets.
  • Financial Inclusion (FINC) in the region was manifested through establishment of ASEAN Working Committee on FINC (WC-FINC) by ASEAN Finance Ministers and Central Bank Governors in April 2016, aiming at promoting and fostering initiatives to advance financial inclusion in ASEAN. The ASEAN Financial Inclusion Framework was adopted in 2016, with objectives to: (i) to support national financial inclusion strategy and implementation plan; (ii) to elevate capacity building of AMS to enhance financial inclusion ecosystem; (iii) to promote innovative financial inclusion via digital platforms; and (iv) to increase awareness on financial inclusion and consumer protection.
  • ASEAN Forum on Taxation (AFT) serves as platform to address tax-related impediments and policies on regional economic integration as well as to support regional dialogue on taxation issues for regional integration. Efforts have been made towards the establishment of the network of bilateral agreements on avoidance of double taxation (DTAs) and addressing withholding tax and double tax issues. To enhance information sharing and reduce possibility of tax evasions, AMS are currently working toward regional implementation of Exchange of Information (EOI) and Automatic Exchange of Information (AEOI). The main objective of AFT is to reduce tax barriers in order to support intra ASEAN trade and investment.
  • ASEAN Insurance Cooperation executed by ASEAN Insurance Regulators’ Meeting (AIRM) with a goal to strengthen the insurance cooperation in the developments of insurance regulatory and supervisory frameworks and research and capacity building through ASEAN Insurance Training and Research Institute (AITRI). Joint plenary meeting with insurance industry is held annually with the members from ASEAN Insurance Council, ASEAN Council of Bureaux (COB), ASEAN Insurance Education Committee, and ASEAN Natural Disasters Research Works Sharing to exchange views on the progress and implementation in the various insurance areas such as compulsory motor insurance under the ASEAN Blue Card Scheme.
    • ASEAN Council Of Bureaux (COB) composed of the designated insurance agencies or instrumentality in each AMS to perform the function necessary for the implementation of the Protocol 5 – ASEAN Scheme of Compulsory Motor Vehicle Insurance of ASEAN Framework Agreement on Facilitation of Goods in Transit (AFAFGIT). A full operation of the Protocol 5 will enable Transit Transport Operators and Road Transit Transport Vehicles to be adequately insured against death or bodily injuries and/or property damages arising from road traffic accidents in the country or countries of transit and of final destination. A web-based system called ASEAN Compulsory Motor Insurance is being developed as a centralized platform for the third party liability motor insurance poly sales and issuance, as well as claim information.
  • ASEAN Insurance Forum (AIFo) facilitates collaboration between WC-FSL and AIRM, as well as leveraging on the private sector, to help achieve significant progress in ASEAN insurance integration. A comprehensive roadmap on ASEAN Insurance Integration Framework 2016-2025 encompassing insurance sector liberalisation in various modes of supply is being developed.
  • ASEAN Cross-Sectoral Coordination Committee (ACSCC) on Disaster Risk Financing and Insurance (DRFI), established in 2013, serves as platform for coordination among ASEAN Finance and Central Bank Deputies Meeting (AFCDM), AIRM, and ASEAN Committee of Disaster Management (ACDM) to implement the ASEAN DRFI Roadmap, which aims to strengthen the capacities of individual AMS and the region to effectively manage the impacts of disasters, enhance the financial resilience to disasters, and promote regional cooperation for a disaster and climate resilience.
  • Cooperation with Asia Pacific Group (APG) on Anti-money Laundering: Since 2006, ASEC has entered into a Memorandum of Understanding with the APG Secretariat to coordinate training and capacity building programmes on anti-money laundering and counter financing of terrorism (AML/CFT) for ASEAN countries that are also members of the APG. The Coordination Agreement on Technical Assistance and Training to Combat Money Laundering and Terrorist Financing was signed by the heads of ASEC and APG Secretariat on 8 July 2005.

C. Strategic Action Plans (SAPs) for ASEAN Financial Integration 2016 – 2025

The SAPs for ASEAN Financial Integration 2016 – 2025, endorsed by the 2nd AFMGM in April 2016 in Vientiane, Lao PDR, are aimed at promoting financial integration, financial inclusion and financial stability in the region in support of ASEAN macroeconomic stability and growth. In line with the AEC Monitoring and Evaluation Framework, the SAPs include policy actions, targets, and milestones, which will help to measure the implementation progress toward financial integration in the region.

The publication of the SAPs for Financial Integration 2016 -2025 can be found at (

II. ASEAN Plus Three (ASEAN+3) Finance Cooperation

  • Chiang Mai Initiative Multilaterisation (CMIM)
    • The Chiang Mai Initiative (CMI) was established by the ASEAN Plus Three Finance Ministers Meeting (AFMM+3) in 2000 as a network of bilateral currency swap arrangements to: (a) address short-term liquidity difficulties in the region and (b) supplement the existing international financial arrangements. The CMI has two phases. In 2004, the AFMM+3 agreed to have a more advanced framework for liquidity support that focuses on the multilaterisation of CMI (CMIM).
    • An enlarged US$120 billion swap arrangement under the CMIM took effect in March 2010. The CMIM signifies the most significant collective response of ASEAN, China, Japan and the Republic of Korea to the global financial crisis. To support the implementation of the CMIM, an independent regional monitoring and surveillance unit, called the ASEAN+3 Macroeconomic Research Office (AMRO) is established in Singapore in 2011.
  • Asian Bond Markets Initiative (ABMI)
    • ABMI was launched in 2003 with two objectives: to (a) develop local-currency denominated bond markets, and (b) develop more accessible and well-functioning regional bond markets both for issuers and investors.
    • Following the new ABMI Roadmap endorsed by the 11th ASEAN+3 Finance Ministers Meeting (AFMM+3) in Madrid in May 2008, the four ABMI Working Groups have evolved into Task Forces addressing the four key areas namely: i) promoting key issuance of local currency-denominated bonds; ii) facilitating the demand of local currency-denominated bonds; iii) improving regulatory framework and iv) improving related infrastructure for the bond markets. The Technical Assistance Coordination Team (TACT) continues to provide technical assistance in bond markets to interested members. One of the key initiatives under the ABMI framework is the establishment of the Credit Guarantee and Investment Facility (CGIF) aimed at supporting the issuance of local currency-denominated bonds in the region. The CGIF was established in November 2010.
    • Under the new Roadmap, Task Forces have been streamlined to develop work programmes and focus on key priorities under each area. ASEC has been assisting the ABMI as administrator of technical assistance programmes being implemented by the Japanese Ministry of Finance under the Japan Technical Assistance Fund (JAFTA). The technical assistance focuses on building capacities of ASEAN countries in various aspects of bond market development (e.g., Government Bonds and infrastructure support).