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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," Macroeconomics Working Papers 23355, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:macroe:23355
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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. Cheng, Gong & Lennkh, Rudolf Alvise, 2018. "RFAs' Financial Structures and Lending Capacities: a Statutory, Accounting and Credit Rating Perspective," MPRA Paper 95754, University Library of Munich, Germany.
    3. Masahiro Kawai, 2015. "From the Chiang Mai Initiative to an Asian Monetary Fund," ADBI Working Papers 527, Asian Development Bank Institute.
    4. Yuming Cui, 2017. "The internationalization of the RMB: a perspective vis a vis East Asian economic and financial integration," Asia Pacific Business Review, Taylor & Francis Journals, vol. 23(3), pages 317-335, May.
    5. Cheng, Gong, 2015. "The Global Financial Safety Net through the Prism of G20 Summits," MPRA Paper 68070, University Library of Munich, Germany, revised Nov 2015.
    6. Fariborz Moshirian, 2014. "Implications of global financial and regulatory policies on systemic risk in Asia," Chapters, in: Iwan J. Azis & Hyun S. Shin (ed.), Global Shock, Risks, and Asian Financial Reform, chapter 8, pages 284-332, Edward Elgar Publishing.
    7. Changyong Rhee & Lea Sumulong & Shahin Vallée, 2013. "Global and regional financial safety nets- lessons from Europe and Asia," Bruegel Working Papers 801, Bruegel.
    8. Luca Alfieri & Nino Kokashvili, 2020. "Financial Safety Nets In East Asia And Europe: A Political Economy Assessment," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 121, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    9. Jamshaid ur Rehman & Tasneem Zafar & Shabbir Ahmad & Aftab Anwar, 2022. "In Search of Common Currency Anchor for ASEAN+3+3 Countries," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(3), pages 237-264, September.

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    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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