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| Participants applaud during the fifth International Public Asset Management Company Forum's (IPAF) conference at Conrad Seoul, Thursday. From front row sixth from left are Korea Asset Management Corporation (KAMCO) Chairman Moon Chang-yong, Financial Services Commission (FSC) Chairman Eun Sung-soo and Asia Development Bank (ADB) Vice President Diwakar Gupta. / Courtesy of FSC |
Korea proposes online NPL transaction platform in Asia
By Park Jae-hyuk
The International Public Asset Management Company Forum's (IPAF) role in sharing knowhow of managing non-performing loans (NPLs) will become more important amid rising protectionism worldwide, according to participants at the international consultative body's fifth global conference held in Seoul, Thursday.
Financial Services Commission (FSC) Chairman Eun Sung-soo said in the event's welcome speech that IPAF and its relevant institutions should review their roles, considering unexpected external shocks that can have a significant impact on financial systems in the trade-reliant Asian region.
"We should not be satisfied with the achievements of the IPAF so far, given that new protectionist policies including the U.S.-China trade dispute have emerged amid the slowdown in the global economy," the nation's top financial regulator said.
He suggested IPAF members establish a joint NPL market for Asian countries.
"In the long-run, the Asian market should be nurtured as a global hub," he said. "A strategic cooperation with the European market, which has a stable online NPL transaction platform, is also needed."
Eun also emphasized the importance of the private sector's role in the NPL market.
"Most emerging countries in Asia lack a private market dealing with NPL resolutions," he said. "In order to enhance the competitiveness of financial systems, however, the expertise of the private sector is needed for a timely resolution of distressed assets."
His ideas were shared by Korea Asset Management Corporation (KAMCO) Chairman Moon Chang-yong and Asia Development Bank (ADB) Vice President Diwakar Gupta.
Mentioning cooperation between private and public sectors as a prerequisite for the successful operation of the IPAF, Moon stressed the necessity of a cross-border online NPL transaction platform.
The KAMCO chairman introduced Onbid, his company's online public asset disposition system, as a model for the platform, saying transactions worth $72 billion have been made through the system since its launch in 2003.
"Unlike Europe and the U.S., however, no meaningful cross-border NPL transaction platform is available in Asia. We see tremendous potential from IPAF members in making this platform possible," he said.
"Starting with exchange of standardized NPL-related information online, IPAF members could benefit from one another, leading us good source of investment, while overcoming physical distance and uncertainties associated with different legal framework."
Moon also proposed the organization of a committee to study the feasibility of the online platform.
Gupta regarded the U.S.-China trade war and uncertainties following the prolonged trade talks as the biggest risk to the Asian market.
Saying the NPL resolution mechanism and NPL market development play a key role in protecting financial stability, the ADB vice president urged policymakers in Asian nations to pay more attention to NPL data management for regional financial stability.
After their speeches during the opening ceremony, three sessions were followed.
During the sessions, panelists discussed ways of enhancing financial stability and economic growth through regional financial cooperation.
Over 250 financial experts from around the world listened to their discussions, sharing their insights.
KAMCO said the next IPAF summit meeting and conference will be held in Thailand.
Consisting of 13 institutions from six countries, the IPAF has held international conferences in Seoul, Bangkok, Beijing and Hanoi to boost regional ties among its members, sharing their expertise and policy experiences in dealing with distressed assets or NPLs across Asia.





































