Updated at 5.36pm: The Asia-Pacific Economic Co-operation forum had leant from mistakes made during the 1997-98 Asian economic crisis, Financial Secretary Henry Tang ying-yen said on Thursday.
Mr Tang was one of the keynote speakers at the 12th Apec finance ministers? meeting, themed ?Maintaining Financial and Monetary Stability?, in Jeju Island, Korea.
?As we look back at the Asian financial turmoil, we have learnt a few lessons,? he said. ?Firstly, the risks posed by highly leveraged offshore institutions, particularly hedge funds; secondly, the importance of having a deep, mature domestic bond market to better recycle domestic savings into domestic investment; and thirdly, the need to implement sound policies, which include, among other things, an appropriate monetary framework,? he said.
Mr Tang said that after the Asian turmoil in 1998, Apec leaders called for increased transparency and disclosure standards in the region.
?Since then, substantive work has been done on reducing banks? overexposure to hedge funds through better counterparty risk management, but direct regulation of hedge funds was ruled out,? he said.
Mr Tang said a securities regulator in Hong Kong now issued guidelines requiring registration and reporting requirements, as well as imposing minimum criteria for assessing hedge fund managers.
He said an effective and efficient regional bond market would be vital in helping to reduce the destabilising movements of capital.