We wanted to build on our strengths as a money market and treasury centre to become the debt hub for Asia. At the same time, in other respects we hoped to emulate Zurich. We could become the premier international asset management centre for Asia. After all, our well-respected regulatory, legal and accounting systems and stable socio-economic conditions had already made Singapore a location of choice for private wealth. After five years of promotion and development, we have achieved some encouraging results. The debt market has grown more than 3-fold since 1998. We have attracted some foreign issuers, and our own corporates have tapped international markets from here. However, we remain largely a market with domestic focus. We therefore need to do more to make our markets deeper, more liquid and internationally established. The prospects are good. Asian countries are now cooperating more closely to develop domestic bond markets. As corporates in our region expand their businesses to take advantage of the recovery, they will need more funding. We also see a clear trend towards more derivative products being structured here as investors look for better yields or protection. All these factors will help us to continue to grow our debt markets in size and sophistication as a major debt hub. In the equity market, the global trend five years ago seemed to be towards cross-border alliances and linkages. This has generally not worked out, except to a limited extent in Europe. Indeed, the last few years have been very difficult for stock markets world-wide.
It will also improve the working of capital markets, so that the businesses can raise the capital they need more conveniently and at lower cost. Asian countries are now making greater efforts in regional financial cooperation. When these succeed, they will hopefully spur countries to go further. They recently launched a USD Asian Bond Fund. Although this did not lead to any big bang, it underscored the interest among Asian economies to develop their capital markets. In consultation with the private sector, regional central banks are now working on a local currency ABF. As a financial centre, Singapore is well placed to seize opportunities as regional markets integrate. We will pursue a two-pronged strategy. First, we will actively participate in regional initiatives with the objective of making Singapore a key “interchange” in regional financial flows. Within ASEAN and ASEAN+3, Singapore is leading initiatives to strengthen capital market capacity-building efforts and foster greater cross-border collaboration among regional capital markets. We are advocating the adoption of international capital market standards and practices in ASEAN as an essential market foundation. We are realistic that the regional market will take some time to develop and accept that we cannot force the pace. But we need to stay engaged and strengthen our linkages with the major economies and emerging regions, to offer high value-added activities and secure our place as a key node in the region. On our own, we are already working to establish exchange linkages with major markets to enlarge market coverage out of Singapore.