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Strengthening ASEAN+3 Regional Financial Arrangements: A New Framework Beyond CMIM

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  • Park , Young-Joon

    (Ajou University)

Abstract

This paper examines the operational limitations of the Chiang Mai Initiative Multilateralization (CMIM) as a regional financial safety net in East Asia and presents a new regional financial arrangement. To overcome the drawbacks of the Chiang Mai Initiative Multilateralization which has never been activated so far, this study proposes that ASEAN+3 establish a new lending facility, so-called a Reserve Fund Facility, and create a regional common reserves asset. The proposed Reserve Fund Facility framework guarantees lending automaticity of the liquidity facility, based on upfront funding instead of pledge funding. Establishing the Reserve Fund Facility could find a way of making up for weakness of the Chiang Mai Initiative Multilateralization and responding to the regional needs for effective regional financial arrangement. The full-fledged Reserve Fund Facility will ultimately contribute to the future development of East Asia's monetary and financial cooperation beyond the Chiang Mai Initiative Multilateralization.

Suggested Citation

  • Park , Young-Joon, 2017. "Strengthening ASEAN+3 Regional Financial Arrangements: A New Framework Beyond CMIM," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 21(1), pages 59-80, March.
    • Handle: RePEc:ris:eaerev:0323
    DOI: 10.11644/KIEP.EAER.2017.21.1.323
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    Keywords

    ASEAN+3; CMIM; East Asia; Regional Financial Arrangements; Liquidity Lending Facility; Upfront Funding;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements

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