New Rules Sought on Asian Exchange
SINGAPORE (AP) _ Seeking to hasten economic recovery, Asian stock exchange chiefs pledged today to more closely regulate their increasingly volatile financial markets.
``There are serious concerns″ about the openness of stock markets, said Michael Shepherd, vice chairman of the Australian Stock Exchange. ``The perception is that it’s risky to invest here.″
Others at a gathering of Asian economic leaders agreed, detailing plans to more carefully manage their markets to bring back wary investors.
But only Amaret Sila-on, chairman of Thailand’s Stock Exchange, was willing to predict a recovery within the next year.
``We will be in much better shape coming out of this recession than when this financial turmoil began,″ he said.
Several central bank governors, meeting separately, said they expect increased restrictions to be placed on currency speculation, blamed for crippling devaluations in Indonesia, Malaysia and Thailand.
The intentions expressed today reflected a 15-point action plan for reforming the world financial system, adopted Tuesday by the economists, officials and businessmen at the East Asia Economic Summit, organized by the World Economic Forum, a private agency based in Switzerland.
Participants expressed concern Tuesday about the drift of the world economy and the growing risk of global recession. They called on the world’s most industrialized nations to establish new measures for monitoring and regulating highly leveraged short-term financial flows and other potentially volatile transactions.
The conferees endorsed Japan’s plan to provide $30 billion in assistance to crisis-stricken East Asia, but said Japan should be prepared to increase that sum.
Europe, Canada and the United States should adopt significant tax cuts, and expand the provision of official loans and credit guarantees to the emerging markets in crisis, especially to cover necessities like food, energy and medical supplies, they added.
The plan also called on East Asian countries to remain committed to further openness to foreign direct investment.
Today, the stock exchange leaders said they were optimistic that new controls would help foster recovery.
Yoshiaki Kaneko, senior managing director of the Tokyo Stock Exchange, said the Japanese economy is at the ``turning point.″
``Our aim ... is to achieve a free, fair and global market by the year 2001,″ Kaneko said.
Kaneko said some signs of recovery will appear in the first half of 1999. But he cautioned that foreign investors, who in the past year have been leaving Japan, will not come back in larger numbers before being encouraged by the success of domestic investors.