Seoul, Korea, May 10, 2013 - Major challenges facing the global economy and key issues of financial regulatory reform were at center stage at the Institute of International Finance (IIF)'s Annual Meeting of Chief Executive Officers of financial institutions active in Asia, hosted by KB Financial Group Bank during May 8-10, 2013 in Seoul.

Dr. Yoon-dae Euh, Chairman and CEO, KB Financial Group, stated at the end of the conference, "We have had an excellent meeting and we are delighted to have had this opportunity to work with the IIF and co-host the 2013 Asia CEO Summit. Such annual Summits provide an outstanding opportunity for policy makers and senior financial sector officials to exchange views on the major economic, banking, and financial regulatory challenges of our time that affect the Asia region and the global economy in general. We are particularly appreciative of the participation in our meeting by Governor Dr. Choongsoo Kim of the Bank of Korea; Mr. Je-Yoon Shin, Chairman of the Korean Financial Services Commission; Mr. Nobuyuki Hirano, President and CEO of The Bank of Tokyo-Mitsubishi; Mr. Chang-Hyun Yun, President of the Korean Institute of Finance; and Mr. Soohyun Choi, Governor of the Financial Supervisory Service of Korea, who all delivered keynote addresses."

The IIF is the global association of leading financial services firms, with more than 460 member institutions headquartered in over 70 countries. IIF President and CEO, Mr. Timothy D. Adams, stated, "We want to thank Dr. Euh and his colleagues from KB Financial Group for hosting the 2013 Asia CEO Summit and making it such an outstanding and productive meeting."

Mr. Adams added, "We came together here at a time of continued concerns about the weak, uneven, and fragile global economic recovery and job prospects, five years after the onset of the deep global financial crisis. The modest ongoing recession in the Euro Area is weighing on the outlook for mature economies. The intensified quantitative easing by major central banks, including by the Bank of Japan in recent months, the uneven policy mix and the appropriate balance between fiscal austerity and growth enhancing policies in mature economies have dominated the policy debate in many fora. At the same time, increasing concerns about regulatory fragmentation and lack of policy coordination threaten to add considerable headwinds to the global recovery."

Mr. Adams pointed out that "Emerging market economies in Asia and other regions continue to be the main engines of global growth, while being exposed to the policy challenge of coping with the weak growth and the spillover effects from the current policy mix in advanced countries. The development of local currency bond markets in Asia and the implications of the evolving global financial regulatory framework are among the key issues debated by the Asia financial community."

The conference included special sessions on the global and regional economic and financial outlook as well as policy challenges, the development and integration of Asian financial markets and on the opportunities and key issues of banking in Asia, and the institutional and regulatory factors impeding the development of Asian bond markets, chaired by Dr. Yoon-dae Euh, Chairman and CEO, KB Financial Group; Mr. Hung Tran, IIF Executive Managing Director; and Mr. Greg Fager, Director of the IIF Asia/Pacific Department.

The conference examined some of the key global events that are influencing economic and financial developments in Asia. Participants noted that more moderate growth in China was a new development since the last meeting and likely to be a long-lasting feature going forward. The recent dramatic policy change undertaken in Japan was another major area of focus, with participants weighing the impact of a weaker yen against the prospects for rising demand in one of the region's major trading partners. Notwithstanding the policy challenges posed by spillover effects from advanced countries, participants observed that growth across the Asian region was demonstrating considerable resiliency.

Participants pointed to the significant potential for enhancing further financial intermediation in Asia and the development of regional capital markets. Banking plays a central role in supporting economic growth in Asian countries-intermediating savings, providing credit to consumers and companies, financing trade and infrastructure projects, and extending access to financial services to a growing segment of their expanding populations.

Participants underscored that there remained a substantial scope for stronger development of capital markets, particularly of local currency bond and securitization markets. To advance this objective, a Task Force on Asian Financial Markets Development and Integration has been formed over the past year comprised by key financial institutions from the region. Participants recognized that emphasis should be placed on the identification of the main existing impediments to local currency bond market development, which could usefully be removed or be addressed by a renewed public-private sector coordinated efforts.

The conference concluded with a roundtable discussion on the impact of new global financial regulatory reforms on the Asia region, chaired by Mr. Kevin Nixon, IIF Managing Director, Regulatory Affairs. Participants noted that, while the banking systems in Asia remained well capitalized and resilient, the evolving global financial regulatory framework would pose some challenges. In particular, participants felt that bank liquidity reforms, over-the-counter derivatives reforms, ringfencing, extraterritoriality, and fragmentation more generally would have a potentially constraining effect on cross-border activity and infrastructure financing. Combined with a possible collateral shortage, exacerbated in Asia due to a lack of accepted high quality liquid assets, necessary to meet both bank liquidity and over-the-counter derivative margin requirements, reforms may also act as a damper on overall lending and the provision of important risk management tools. It was further felt that the international bodies setting the reform agenda needed to take greater account of the needs, level of development, and market structure of Asian economies, and emerging markets more generally, in developing and implementing the global reform agenda. Finally, it was noted that the ongoing retreat of some mature markets banks from emerging markets in Asia posed opportunities and challenges for regional and national banks.