Financial Integration
Public Affairs and Communications
Asia Policy
June 2014
2
Regionalization
Recent developments
MOU with ETDA
Standards Capacity Building Programme
Theory of Optimum Financial Area...
ACMF
3
ASEAN Integration Focal Areas
ECONOMIC
AEC
ASP
ABMI
AFTA
CMIM
APG - AML
ASEAN
Link
RIA-Fin
Economic v. Financial Integration
Drivers and benefits
Enhanced
productivity
Comparative
advantage
Economies of
Scale
Incr...
ASEAN’s
Working Level
Objectives
ASEAN’s
Components of
High Level
Objectives
ASEAN’s High
Level Objective
Economic
Communi...
TECHNICAL
SUBSTRUCTURE
Technology
Standards
Communication
Standards
Security and
Resilience
Computing and Protocols
Intero...
7
Security
Investor
Protection
Safe Markets
Reputational
and Business
Risk
Transparency
Legal Basis
Governance
Disclosure
...
8
So, what then does the environment look like today?
What is the ideal environment?
9
Differing Systems
10
Convergent Systems
Developmental support: Lessons learned
from global regionalization projects
Regionalization
Communication
Regional Market
...
Technical
Assistance
Capacity
Building
Identification
of gaps
Definition of
market
practices
12
Regional
Payments
ECP Chai...
13
ASEAN PSS
Cooperation
Workshops
WCPSS
National
Bank
Associations ASEAN
Bankers
Association
SWIFT
Task Force on
Standard...
14
World Bank
Regionalization
Guidelines
Theory of Optimum
Financial Areas
CPSS-IOSCO
Principles for
FMIs
Tools for policy...
Why these tools are important
Optimum
Financial Areas
• Macroeconomic issues
• Allusion to technical aspects
World Bank
Re...
MoU with Thailand ETDA
In ASEAN and Domestic markets:
SWIFT and ETDA cooperate in the arena of standardization and
connect...
17
ASEAN
ISO
20022
ABMF
WC-PSS
Brunei
ASEAN’s First
ISO RTGS
SWIFT is the official
secretariat for Market
Guide maintenanc...
Asia Pacific Financial Forum
• Public Private Partnership
• Recommendations to APEC finance ministers
• SWIFT is founding ...
19
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SWIFT's role in supporting financial intergration in ASEAN, Usama DeLorenzo, SWIFT

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SWIFT's role in supporting financial intergration in ASEAN, Usama DeLorenzo, SWIFT

  1. 1. Financial Integration Public Affairs and Communications Asia Policy June 2014
  2. 2. 2 Regionalization Recent developments MOU with ETDA Standards Capacity Building Programme Theory of Optimum Financial Areas (SWIFT Institute) Asia Pacific Finance Forum (Public Private Initiative) ASEAN PSS Cooperation Workshops World Bank Regionalization Guidelines Theory of Optimum Financial Areas CPSS-IOSCO Principles for FMIs Tools for policy makers SWIFT supports 20/30 global regionalization projects ASEAN ISO 20022 ABMF WC-PSS Brunei ASEAN’s First RTGS
  3. 3. ACMF 3 ASEAN Integration Focal Areas ECONOMIC AEC ASP ABMI AFTA CMIM APG - AML ASEAN Link RIA-Fin
  4. 4. Economic v. Financial Integration Drivers and benefits Enhanced productivity Comparative advantage Economies of Scale Increased Trade Political Alignment Avoidance of war Economic The engine of economic integration Risk management and mitigation Better governance Transparency Reduction in transactional costs Common settlement mechanism Financial 4 Overarching Economic Concerns The nuts and bolts of economic integration
  5. 5. ASEAN’s Working Level Objectives ASEAN’s Components of High Level Objectives ASEAN’s High Level Objective Economic Community Financial Integration Financial Infrastructure Regulatory Harmony Economic Integration Capital accounts, trade barriers, etc 5 Where we fit in to the regional integration agenda…
  6. 6. TECHNICAL SUBSTRUCTURE Technology Standards Communication Standards Security and Resilience Computing and Protocols Interoperability is not enough. Automation is the goal. STP is ideal. 1. What needs to be addressed? 2. What are regulators looking for? 3. What’s required for FMIs? 4. What about SMEs?
  7. 7. 7 Security Investor Protection Safe Markets Reputational and Business Risk Transparency Legal Basis Governance Disclosure Business Risk Market Access Technological Access Participation Requirements FMI Links Comm Protocols and Standards Resilience Operational Risk Efficiency Comm Protocols and Standards Efficiency Cost Savings Less Errors Building Capacity
  8. 8. 8 So, what then does the environment look like today? What is the ideal environment?
  9. 9. 9 Differing Systems
  10. 10. 10 Convergent Systems
  11. 11. Developmental support: Lessons learned from global regionalization projects Regionalization Communication Regional Market Practices Collaboration 11 Someone at the helm, coordinating and leading. Established delineation between collaborative and competitive spaces. Clear documentation on how to access the technical substructure of regional markets.
  12. 12. Technical Assistance Capacity Building Identification of gaps Definition of market practices 12 Regional Payments ECP Chairman IPFA Chairman SWIFT Standards Indonesia Vietnam Myanmar Thailand Philippines Cambodia Malaysia Brunei Indonesia Vietnam Myanmar Thailand Philippines Cambodia Malaysia Lao PDR Market Guides SWIFT in ASEAN WCPSS Survey
  13. 13. 13 ASEAN PSS Cooperation Workshops WCPSS National Bank Associations ASEAN Bankers Association SWIFT Task Force on Standardization BoT ETDA ASEAN Experts Regional Bank(s) General experiences and implementation challenges. Support on Standards and global perspectives and lessons learned. Leading coordination of workshops. Coordinating workshops at national level and co-host. Perspective at a national level – experience of payments, trade and securities integration. Led to WCPSS choosing ISO 20022 for ASEAN regional payments. Central Banks Co-host and supporter of workshops and providing guidance for national market. Cooperation in Payments
  14. 14. 14 World Bank Regionalization Guidelines Theory of Optimum Financial Areas CPSS-IOSCO Principles for FMIs Tools for policy makers
  15. 15. Why these tools are important Optimum Financial Areas • Macroeconomic issues • Allusion to technical aspects World Bank Regionalization GLs • Financial Market Architecture • Regional view, domestic focus • Touches on technical CPSS-IOSCO PFMI • Financial Market Infrastructure • Domestic focus • Technical nature 15
  16. 16. MoU with Thailand ETDA In ASEAN and Domestic markets: SWIFT and ETDA cooperate in the arena of standardization and connectivity for: – Corporate to Bank – Bank to Bank – Securities 16
  17. 17. 17 ASEAN ISO 20022 ABMF WC-PSS Brunei ASEAN’s First ISO RTGS SWIFT is the official secretariat for Market Guide maintenance Conducted technical workshops for WC-PSS, assisted with Survey and currently working on identifying gaps for payments integration Brunei will be Asia’s first market to build an RTGS on ISO 20022 Standards capacity building program on ISO 20022 for FMIs – 2013 ASEAN Bonds and Payments both elect ISO 20022
  18. 18. Asia Pacific Financial Forum • Public Private Partnership • Recommendations to APEC finance ministers • SWIFT is founding member and heavily involved to represent the interests of the global financial community 18 Insurance and retirement income Trade finance Lending infrastructure Financial market infrastructure & cross- border practices Capital markets Areas of focus for APFF
  19. 19. 19 Thank you
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