Welcome!

In this edition we look at:

• The Centre's China program
• Training APEC regulators in OECD investment strategies
• Development of an online catalogue for financial sector reglaltors

Plus the Centre outlines its pipeline programs.

We encourage your feedback.

NEWS: by MAFC

The Melbourne APEC Finance Centre (MAFC) at Monash University recently organised a Business Roundtable in the People's Republic of China.

The event was arranged on behalf of the Hon Theo Theophanous MLC, the Victorian Government’s Minister for Industry and Trade, to deepen relations between Melbourne and Shanghai in the provision of financial services.

Minister Theophanous met with Mr Sha Hai Lin, Deputy Secretary General of the Shanghai Municipal People’s Government to discuss the economic, financial and social challenges of their respective cities.

Mr Sha and the Minister confirmed a joint program by the MAFC in conjunction with the Asia Pacific Finance and Development Centre to deliver capacity building training in risk management in Shanghai later in 2008.

CAPACITY BUILDING: by the APEC Centre

APEC regulators recently attended the training component of a capacity building program in Melbourne to study policy measures to enhance investment flows in their respective economies. Training focussed on aspects of the OECD’s Policy Framework for Investment, and included specific modules on governance and competition policy.

Some of the developing economies in APEC have yet to recover the levels of investment from pre-Asian financial crisis levels. The causes of lower levels of investment include barriers governments establish that impact directly on domestic and foreign investment flows. Reducing these barriers has become a structural priority of APEC.

Good investment results in poverty reduction and improves innovation, yet business investment still continues to fall short of development needs in many economies and represents a significant opportunity cost.

The objectives of the program include highlighting the determinants of a positive and welcoming investment climate. In addressing governance and competition policy, as well as aspects that comprise a sound policy environment, the program’s purpose is to improve investment flows, foster more productive economies and achieve sustainable development.

PROJECTS: by MAFC

The Melbourne APEC Finance Centre recently developed a policy catalogue for APEC finance officials, including central bankers, regulators and supervisors, on financial sector reform.

The ‘Policy Experience and Choices’ website is an initiative of the APEC Finance Ministers Process (FMP) and its purpose is to enable officials to consider policy reform options through observing what paths other economies have taken.

The concept for the catalogue was expressed in the Third APEC Policy Dialogue Workshop in May 2007. A menu of policy options for financial sector reform was recommended with the primary purpose of sharing information, as opposed to prescribing particular policy reform initiatives.

The catalogue is now complete and will be formally launched in July at the APEC Senior Finance Officials (SFOM) meeting in Cusco, Peru.

--- UPCOMING PROGRAMS BY MAFC & THE APEC CENTRE ---

NEWS: by MAFC

The call by APEC Economic Leaders for an Investment Facilitation Action Plan (IFAP) to develop a comprehensive approach to promoting investment flows is seen as fundamental for regional economic integration. The OECD’s Policy Framework for Investment assists regulators to understand the value of policies that promote domestic and foreign investment flows vital to promoting regional development and security.

The Melbourne APEC Finance Centre is tendering to deliver capacity building training for regional finance regulators to analyse how investment flows through policy and promotion frameworks can be enhanced. The objective of the program is to build expertise in APEC ministries and agencies responsible for investment policy and facilitation to promote investment.

Economies that improve investment measures are able to attract suitable technologies, skills and expertise, and gain access to international markets.

NEWS: by the APEC Centre

Forecasts of steady increases in food commodity prices create a new policy environment in which to consider the benefits of reform to developing countries in agricultural trade. APEC leaders have committed to a successful result from the Doha Development Round (DDR), and the WTO wants to see the DDR concluded by late 2008.

The Australian APEC Study Centre is tendering to deliver a capacity building program for regional trade and agricultural regulators to promote agricultural growth and reform. The objectives of the program are to enhance the capacity of officials and leading academics to develop reform options in agricultural trade for the Doha round and in the emerging policy environment of higher agricultural prices.

The program will enable officials to respond to the challenge of shaping agricultural policy with measures that improve the contribution of agricultural production to economic growth.

NEWS: by MAFC

The successful development of financial services depends on expanding national capacities for modern and effective prudential supervision, especially in times of economic change and volatile capital markets. In assessing capital requirements of financial institutions in accordance with Basel II, the role of financial regulators is shifting from approval to assessment and represents the trend towards an increased focus on governance and risk.

The Melbourne APEC Finance Centre is tendering to deliver an innovative training program in the regulatory management of capital models. The program’s objective is to ensure the establishment of appropriate governance and risk management systems to support the introduction of standardised risk management models.

Prudential supervisors, particularly in banking and insurance, need to develop the ability to assess and monitor internal models developed by the industries they supervise, in line with international developments toward the use of models, to determine regulatory and economic capital requirements.

NEWS: by MAFC

Strengthening regional financial systems and the need to improve regulatory frameworks in banking continue to be priorities for APEC. Banks in the developing economy environment face a number of financial and operational risks.

The Melbourne APEC Finance Centre, in partnership with the Asia Pacific Finance and Development Centre of the People's Republic of China, are awaiting final approval for a capacity building training program to enhance risk management and governance in the region’s banks under the Basel II framework. Specific objectives of the training are to examine ways of handling credit, retail banking, consumer and mortgage risks. External risks now confronting the region’s banking systems as a consequence of tighter credit and liquidity conditions arising from the sub-prime mortgage crisis will also be analysed.

Participants from APEC economies will develop a better understanding of the needs for changes in governance processes and organisational structures of risk management within banks.