YOKOHAMA—Finance Secretary Carlos Dominguez III said here the Asian Development Bank (ADB)’s Board of Governors would, on his watch as its chairperson, pursue “the changes that need to be done” by this multilateral lender as it enters a “year of many challenges.”
In a speech accepting his designation as head of the ADB’s governing body, Dominguez described his new position at the bank as a “great honor and responsibility,” and expressed confidence that the Board of Governors has both the “depth and talent” and “wealth of experience” to undertake such needed reforms.
The ADB Board of Governors is the highest decision-making body of the ADB as the institution’s Charter vests all the powers of the institution in its governing body.
“I humbly accept my designation as the next chair of this distinguished Board of Governors,” said Dominguez in his acceptance speech at the Pacifico Yokohama Conference Center last weekend. “This is both a great honor and responsibility.”
“This year will be a year of many challenges. The Board of Governors has both the depth, talent and wealth of experience to guide the ADB in the changes that need to be done,” he said.
“I will make every effort to contribute positively to the deliberations of this board. Again, thank you for your confidence in the Philippine team,” he added.
In an earlier ADB seminar here organized by the host country Japan, Dominguez cited the successful efforts by Asia’s economies over the past two decades to improve corporate governance and develop regional mechanisms to ensure financial stability and avoid a repeat of the economic crisis that buffeted the region in 1997.
With all economies in the region working together in the aftermath of the 1997 crisis to install mechanisms for financial support, Dominguez said the likelihood of a similar financial meltdown in the future has now been reduced.
But he said that this “does not mean that our regulatory authorities should let down their guard.”
Dominguez noted the old fiscal and corporate practices that plunged Asia into a crisis 20 years ago and the subsequent changes that were made to build up the region’s resilience against financial market volatilities.
These resilience-building changes include adopting flexible foreign exchange rate regimes; implementing corporate and financial restructuring measures; maintaining fiscal deficit ceilings, limits to debt-to-GDP ratio and a diversified tax base; and introducing risk-based approaches to the regulation and supervision of banks and corporations.
On top of adopting more prudent practices, Dominguez said Southeast Asia countries have also come up with mechanisms for improved cooperation to assure financial stability.
Among these mechanisms is the establishment of the ASEAN + 3 (Association of Southeast Asian Nations and China, Japan, South Korea) Macroeconomic Research Office to enable regional surveillance and the close monitoring of regional trends, he said.
Dominguez also cited the launching of the Chiang Mai Initiative Multilaterization (CMIM), which established a network of bilateral swap agreements to help limit currency volatility, and the introduction of the CMIM-Precautionary Line, which serves as a crisis prevention facility.
