The 16th ASEAN Banking Conference and 36th ASEAN Banking Council Meeting were held in Singapore from 16th to 18th November 2006 at Parkroyal on Coleman Street, Singapore.

The Association of Banks in Singapore hosted the meetings in accordance with the tradition of rotation of venue.

With a total of 180 bankers from 10 ASEAN countries in attendance, the Conference theme was “Unity and Integration”. The importance of the conference was underscored by the attendance of Ambassadors from a number of ASEAN countries as well as representative from ASEAN Secretariat.

In his welcoming remarks, Mr. David Conner, Head of Delegation for Singapore, noted that “in view of the challenges and opportunities that will compel greater co-operation among ASEAN members, it is timely that bankers come together and explore ways to work more closely to support ASEAN’s growth”.

In his opening remarks the ASEAN Bankers Association’s Chairman, Mr. Wee Ee Cheong, who is also the Chairman of ABS, said, “ASEAN is entering exciting times. The potential for economic growth is unprecedented as member countries collectively focus on improving their livelihood and economic development.” Mr. Wee urged all banks operating in ASEAN, both local and foreign, “to actively explore how they can co-operate and work together to promote the attractiveness of ASEAN as a vibrant economic and business region.”

Mr. Wee added that he hoped this annual gathering of senior ASEAN bankers would further strengthen existing ties among the banks and identify new opportunities leading to further economic development and integration throughout the region.

Mr. Heng Swee Keat, Managing Director of the Monetary Authority of Singapore was the Guest of Honor and delivered the keynote address for the Conference. Mr. Heng noted that ASEAN has recovered from the 1997/98 financial crisis and ASEAN banks have restored their financial strength. However, he added, “While we have made progress, we must not lose sight of the many problems that remain and the challenges that lie ahead. We must continue to undertake structural reforms in our economies strengthen financial systems and improve the competitiveness of the corporate sector. We must also improve our laws and polices relating to investment, labor and taxation, and to signal clearly that we welcome foreign investments”

Mr. Heng also said that an integrated ASEAN presents many opportunities ASEAN banks and that collectively they have an important role to play. This will include greater financing for small and medium sized enterprises (SMEs), infrastructure financing and Islamic banking.

At the Plenary Session, Special Guest Speaker, Professor Tommy Koh, Singapore’s Ambassador at Large, shared his views on the opportunities and challenges represented by further integration of ASEAN.

Ambassador Koh informed the delegates that ASEAN governments have formed a group with one member from each of the ten ASEAN countries to draft a new ASEAN Charter This document will be intended to strengthen ASEAN by “taking our unity and integration to a higher peak”.  He added that the new Charter should accelerate the realization of a single ASEAN market and help narrow the development gap between members. Ambassador Koh will represent Singapore in the ten member drafting team.

Following Professor Koh’s presentation, delegates were divided into two groups.

The first group discussed “how ASEAN banks can take advantage of finance, investment and trade opportunities under an integrated ASEAN”.  To kick of the discussion, Professor Mirza of UNCTAD gave a briefing on the “recent trends in FDI flow, its impact and strategies for ASEAN to attract foreign direct investment (FDI)”. Dr. Worapot Manupipatpong, ASEAN Secretariat, briefed delegates on the various ASEAN initiatives. Following his presentation participants discussed ideas for strengthening co-operation amongst ASEAN banks that would be examined in greater detail by the Association’s three permanent Committees.

The second group deliberated on “Competition in an integrated and liberalized ASEAN – whether a bank’s size really matter”. To stimulate the discussion, Mr. Jean-Marc Poullet of McKinsey & Co. shared the firm’s views on the subject and the results of its survey on the subject. The essential point was that although size does have advantages, it does not mean small banks have no roles to play. The European experience shows that small banks are still able to succeed by focusing on specific areas of business where they have a competitive advantage.

At the 36th ASEAN Council Meeting held on 18th November 2006, the following programs were adopted for implementation:

1. Organize an investment workshop [including infrastructure project finance] in Phnom Penh to showcase investment [including infrastructure] projects in the CLMV countries as well as Indonesia and Philippines for joint financing by banks in ASEAN to help narrow the development gap.

2. Indonesia will host a follow-up workshop on Islamic finance. A task force to develop Islamic financing schemes for SMEs to complement existing conventional lending to SME will be established.

3. A seminar to update member countries on their respective status on the implementation of BIS 2 as well as International Accounting Standards [IAS] especially IAS 32 and 39. The Thai Bankers Association will host it.

4. Workshop on Operational Risks [including Key Risk Indicators] will be hosted by Brunei [alternative venue – Vietnam], together with Risk Management Association; and the Education Committee will develop and organize formal training courses for Operational Risk Managers. Additionally, members will share their respective training syllabi and relevant banking guidelines and best practices.

5.  The Inter-Regional Relations Committee will coordinate a liaison and study mission to India in early 2007.

6. The 37th ASEAN Banking Council Meeting will be held in Hanoi in the 4th quarter of 2007 and hosted by the Vietnam Banks Association.

7. The 17th ASEAN Banking Conference and 38th ASEAN Banking Council Meeting will be held in 2008 in Brunei.

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Issued by:
Mr. TAY Kah Chye
Secretary General
ASEAN Bankers Association
20th November 2006.