APEC finance ministers met in Kyoto in 1996 and had identified policies contributing to stable capital flows, policies fostering domestic financial and capital market development, and the importance of developing policies and financing techniques that attract and channel private investment in infrastructure development.
In 1997, finance ministers further adopted voluntary principles for facilitating private sector participation in infrastructure, and voluntary principles in promoting financial and capital market development. They agreed to launch the following collaborative initiatives to support the work in the aforementioned fields:
- Enhanced cooperation among export financing institutions
- Strengthening financial market supervision
- Strengthening clearing and settlement infrastructure
- Supporting the development of rating agencies and strengthening information disclosure standards
- A regional forum on pension fund reform
- A regional forum on securitization
- A voluntary action plan for supporting the freer and stable flow of capital
Facing the financial turmoil in Asia in 1997 and 1998, Finance Ministers worked together to restore stability and promote recovery in the affected economies. Their cooperation was also aimed at reinforcing the global financial system and reducing the likelihood of future recurrences. They endorsed the idea of enhancing the surveillance of financial sector supervisory regimes and agreed to implement the Action Plans for Strengthening Training of Bank Supervisors and Securities Regulators in APEC economies. They also worked on mitigating the social impact of the crisis on the poor, restructuring corporate and financial sector, and strengthening international financial architecture.
Since then, several new initiatives were explored, covering domestic bond markets development, privatization, bank failure management, financial regulators training, managing and regulating change in life insurance and pension, corporate governance, insolvency law, public sector management, social safety nets, fighting financial crimes, electronic financial transaction systems, etc.
During the economic recovery and growth of the early and mid-2000s, the FMP further expanded its scope across a broader range of issues:
- Finance Ministers agreed on a set of Strategic Goals and Modus Operandi of the FMP in 2001, to guide and focus the FMP’s work in a way that complements APEC’s overall vision.
- An APEC Action Plan on Combating the Financing of Terrorism was endorsed in 2002 in response to the terrorist threat posed by the 9/11 attacks, and an APEC Initiative on Remittance Systems was launched to identify the economic and structural impediments contributing to the circumvention of formal remittance channels.
- A Memorandum of Understanding on Cooperation Among the APEC Financial Institutions Dealing with Small and Medium Enterprises (SMEs) signed by financial institutions from participating economies in September 2003 to support financing for SMEs.
- Finance Ministers issued the Jeju Declaration on Enhancing Regional Cooperation against the Challenges of Population Ageing and an expert group was agreed to be formed to provide policy recommendations to aging issue in 2005.
- The FMP Strategic Goals was updated and the Medium-Term Agenda of the FMP was adopted in 2006 to keep abreast with the rapid evolution of the global and regional economic and business environment and APEC’s activities overall.
- A web-based APEC Catalogue of Policy Experience and Choice was agreed in 2007 to collect and share knowledge on financial reform based on the practical experience of member economies and international agencies.
Other new initiatives undertaken during this period included:
- APEC Future Economic Leaders Think Tank,
- APEC Finance and Development Program,
- Insolvency Reform,
- Reform of Financial Sector,
- Deepening Financial Regulatory Capacity and Fiscal Management etc.
When faced with the global financial crisis in 2008, Finance Ministers discussed ways to restore stability of international financial system, focusing on weaknesses in existing regulatory and supervisory frameworks, particularly with regard to transparency and disclosure by financial institutions, risk management and the role of credit ratings. Ministers further called for structural reforms to support strong, sustainable and balanced growth.
In 2010, the Kyoto Report on Growth Strategy and Finance was adopted and submitted to APEC Leaders, which identified priorities for securing future growth, namely, rebalancing and strengthening global demand, pursuing sound fiscal management, and enhancing finance to key sectors such as infrastructure, small and medium enterprises, households and green investment.
Post-crisis work of FMP involved areas such as regulatory reform, financial empowerment, PPP in infrastructure development, climate change/green finance, regional financial integration and financial resilience. A number of initiatives were implemented, among which the following are noteworthy:
- A Policy Statement on Financial Literacy and Education was issued by Finance Ministers in 2012;
- The Implementation Roadmap to Develop Successful Infrastructure Public-Private Partnership Projects in the APEC Region was adopted in 2014;
- The Cebu Action Plan, which is a comprehensive FMP Roadmap with a list of initiatives that could take up to 10 years, was endorsed at the 2015 Finance Ministers’ Meeting in 2015. It is underpinned by four priorities:
- Prompting Financial Integration;
- Advancing Fiscal Reforms and Transparency;
- Enhancing Financial Resilience;
- Accelerating Infrastructure Development and Financing.
It aims to create an APEC community that is more prosperous financially integrated, transparent, resilient, and connected.
- A concept note on the Asia Region Funds Passport (ARFP) was written to facilitate the cross-border marketing of managed funds across participating economies in Asia. A Memorandum of Co-operation on the Establishment and Implementation (which came into effect in 2016) was signed by Australia, Japan, Korea, New Zealand and Thailand. Currently, the participating economies are finalizing legal and regulatory requirements in their respective jurisdictions. It is expected that the funds passport will commence in the first half of 2018.
- A policy statement on Diversifying Financing Sources and Fostering Private Sector Involvement in Infrastructure Investment report was endorsed in 2017.