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Financial Safety Nets in Asia : Genesis, Evolution, Adequacy, and Way Forward

Author

Listed:
  • Hal Hill

    (Asian Development Bank Institute (ADBI))

  • Jayant Menon

Abstract

Financial safety nets in Asia have come a long way since the Asian Financial Crisis (AFC) of 1997–98. Not wanting to rely solely on the International Monetary Fund (IMF) again, the Chiang Mai Initiative (CMI) was created in 2000. When the CMI also proved inadequate following the Global Financial Crisis (GFC), it was first multilateralized (CMIM), and then doubled in size to $240 billion, while the IMF de-linked portion was increased to 30%. A surveillance unit, the Association for Southeast Asian Nations (ASEAN)+3 Macroeconomic Research Office (AMRO), was set-up in 2011. These are impressive developments, but are they enough to make the CMIM workable? Without clear and rapid-response procedures to handle a fast-developing financial emergency, it is unlikely that the CMIM will be used even as a complement to the IMF. To serve as a stand-alone option however, its size or the IMF de-linked portion of funds needs to be further increased, as does its membership to add diversity. But if AMRO could develop into an independent and credible surveillance authority, then it could lead the next rescue.

Suggested Citation

  • Hal Hill & Jayant Menon, 2012. "Financial Safety Nets in Asia : Genesis, Evolution, Adequacy, and Way Forward," Finance Working Papers 23355, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:financ:23355
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    References listed on IDEAS

    as
    1. Iwan J. Azis, 2012. "Asian Regional Financial Safety Nets? Don't Hold Your Breath," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 8(3), pages 321-340, August.
    2. Mario Lamberte & Peter J. Morgan, 2012. "Regional and Global Monetary Cooperation," Finance Working Papers 23190, East Asian Bureau of Economic Research.
    3. Masahiro Kawai, 2010. "Reform Of The International Financial Architecture: An Asian Perspective," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 55(01), pages 207-242.
    4. C. Randall Henning, 2011. "Coordinating Regional and Multilateral Financial Institutions," Working Paper Series WP11-9, Peterson Institute for International Economics.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Siregar, Reza & Miyaki, Keita, 2013. "Regional Financial Arrangement: An Impetus for Regional Policy Cooperation," MPRA Paper 51050, University Library of Munich, Germany.
    2. Changyong Rhee & Lea Sumulong & Shahin Vallée, 2013. "Global and regional financial safety nets: lessons from Europe and Asia," Working Papers 801, Bruegel.
    3. repec:taf:apbizr:v:23:y:2017:i:3:p:317-335 is not listed on IDEAS

    More about this item

    Keywords

    Financial Safety Nets; Asia; global financial crisis; CMIM; IMF; AMRO; surveillance authority;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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