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Background |
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The Asian financial crisis of 1997-98
caused extensive damage in East Asia. This experience made the East Asian
countries acutely aware of the need to promote regional financial cooperation to
prevent resurgence of a crisis and to attain stable economic growth. Since then,
Japan has been vigorously promoting regional financial cooperation together with
the other ASEAN+3 countries. With the rapid increase in economic interdependency
in East Asia, regional financial cooperation is becoming all the more important.
*ASEAN+3: 10 countries of Association of Southeast
Asian Nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand and Vietnam), China, Japan, and the Republic of
Korea |
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1. Chiang Mai Initiative (CMI) |
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Objective |
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The Chiang Mai Initiative aims to create a network of bilateral
swap arrangements (BSAs) among ASEAN+3 countries to address short-term liquidity
difficulties in the region and to supplement the existing international
financial arrangements. |
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Background |
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After the Asian financial crisis, East Asian countries shared
the need to promote regional financial cooperation. At the ASEAN+3 Summit in
November 1999, ASEAN+3 leaders agreed to enhance “self-help and support
mechanisms in East Asia” through the ASEAN+3 framework. At the ASEAN+3 Finance
Ministers’ Meeting in May 2000, finance ministers agreed to promote the Chiang
Mai Initiative to establish a regional financial arrangement to supplement the
existing international facilities.
(Brief Chronology) |
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1997-1998 December 1997 April 1999 |
Asian financial crisis The 1st
ASEAN+3 Summit (Kuala Lumpur, Malaysia)
The 1st
ASEAN+3 Finance Ministers’ Meeting (Manila, Philippines) |
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November 1999 |
The 3rd
ASEAN+3 Summit (Manila, the Philippines)
－Leaders agreed to enhance “self-help and support mechanisms in East Asia.”
(Joint Statement on East Asia Cooperation) |
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May. 2000 |
The 2nd
ASEAN+3 Finance Ministers’ Meeting (Chiang Mai, Thailand)
－Finance ministers agreed to promote the Chiang Mai Initiative.
(Joint Ministerial Statement of the Second ASEAN+3 Finance Ministers’ Meeting) |
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May. 2004
May 2005
May 2006
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The 4th ASEAN+3 Finance Ministers’ Meetings in May 2004 (Jeju,
Korea) －Finance ministers agreed to explore the ways of enhancing its
effectiveness of CMI.
(Joint Ministerial Statement of the Seventh ASEAN+3 Finance Ministers’ Meeting)
The 8th ASEAN+3 Finance Ministers’ Meeting in May 2005 (Istanbul, Turkey)
－Finance ministers agreed to take the following measures to enhance the
effectiveness of the CMI: (1) integration and enhancement of ASEAN+3 economic
surveillance into the CMI framework, (2) clear - defining of the swap activation
process and the adoption of a collective decision-making mechanism, (3)
significant increase in the size of swaps, and (4) improvement of the drawdown
mechanism.
(Joint
Ministerial Statement of the Eighth ASEAN+3 Finance Ministers’ Meeting)
The 9th ASEAN+3 Finance Ministers’ Meeting (Hyderabad, India)－Finance ministers agreed to complete the
strengthening of the regional liquidity support network; Substantial progress of
the CMI has been made such as adoption of collective decision-making procedure
for the swap activation and launch of the Group of Experts (GOE) and the
Technical Working Group on Economic and Financial Monitoring (ETWG) to
explore the ways for further strengthening surveillance capacity in East Asia.
Also, finance ministers agreed to task the Deputies to set up a “new task force”
to further study various possible options towards an advanced framework of the
regional liquidity support arrangement (CMI multilateralization or Post-CMI).
(Joint
Ministerial Statement of the Ninth ASEAN+3 Finance Ministers’
Meeting)
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Network of BSAs under the CMI
【PDF】 |
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Total amount: US$64 billion (16 arrangements) |
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BSAs were concluded among eight countries: China, Indonesia,
Japan, the Republic of Korea, Malaysia, the Philippines, Singapore, and
Thailand.
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Japan’s BSAs under the CMI |
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Recent Progress |
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At the 10th
ASEAN+3 Finance Ministers’ Meeting in May 2007 (Kyoto, Japan), finance ministers
unanimously agreed in principle that a self-managed reserve pooling arrangement
governed by a single contractual agreement is an appropriate form of CMI
multilateralisation, proceeding with a step-by-step approach. Finance ministers
instructed the Deputies to carry out further in-depth studies on the key
elements of the multilateralisation of the CMI including surveillance, reserve
eligibility, size of commitment, borrowing quota and activation mechanism,
while reiterating their commitment to maintain the two core objectives of the CMI, i.e., (i) to address short-term liquidity difficulties in the region and
(ii) to supplement the existing international financial arrangements.
(Joint Ministerial Statement of the Tenth ASEAN+3
Finance Ministers’ Meeting)
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2. Economic Review and Policy Dialogue
（ERPD）
Objective |
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Effective economic review and policy dialogue would contribute
to the prevention of financial crises through the early detection of
irregularities and the swift implementation of remedial policy actions. It will
also lay a foundation for providing immediate assistance, such as the CMI, in
the event of a crisis.
ASEAN+3 countries have been conducting Economic Review and Policy Dialogue (ERPD)
at the Ministers’ level annually and at the Deputies’ level twice a year to
discuss economic and financial developments in the region. |
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Recent Progress |
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At the 9th ASEAN+3 Finance Ministers’ Meeting in May 2006 (Hyderabad, India),
finance ministers agreed to launch the Group of Experts (GOE) and the Technical
Working Group on Economic and Financial Monitoring (ETWG) to explore the ways
for further strengthening surveillance capacity in East Asia. While welcoming
the initial progress made by the GOE and the ETWG, finance ministers at the 10th
Meeting in May 2007 (Kyoto, Japan) further agreed to explore ways on how to link
these activities with strengthened surveillance within the region.
(Joint Ministerial Statement of the Tenth ASEAN+3
Finance Ministers’ Meeting)
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3. Asian Bond Markets Initiative (ABMI)
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Objective |
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The Asian Bond Markets Initiative aims to develop efficient and
liquid bond markets in Asia, enabling better utilization of Asian savings for
Asian investments. Activities of the ABMI focus on the following two areas: (1)
facilitating access to the market through a wider variety of issuers and types
of bonds, and (2)
enhancing market infrastructure to foster bond markets in Asia. |
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Background |
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Because of the underdevelopment of capital markets, Asian
countries have depended on short-term foreign currency-denominated financing.
This causes “maturity” and “currency” mismatches, making the region vulnerable
to volatility in short-term capital movements. These risks were brought to the
surface by the Asian financial crisis in 1997-98. Developing bond markets in the
region is a very effective way to solve such problems and to significantly
reduce “currency” and “maturity” mismatches in regional financing. At the
6th ASEAN+3 Finance Ministers’ Meeting in August 2003 (Manila, the Philippines),
finance ministers agreed to promote the Asian Bond Markets Initiative. |
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(Joint
Ministerial Statement of the Sixth ASEAN+3 Finance Ministers’ Meeting)
(Chairman’s Press Release on the Asian Bond Markets Initiative)
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Recent Progress |
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Issuance of Korean Collateralized Bond Obligations (CBO)
(“Pan-Asia Bond”) with guarantee by the Japan Bank for International Cooperation
(JBIC) and the Industrial Bank of Korea (IBK).
(Press release: Joint Efforts by the Ministry of Finance of Japan and the
Ministry of Finance & Economy of the Republic of Korea to Promote Collateralized
Debt Obligations Markets in Asia) |
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Issuance of local currency-denominated bonds by Japanese subsidiaries in
Thailand, Malaysia and Indonesia with a partial credit guarantee from the JBIC and Nippon Export and
Investment Insurance (NEXI). |
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Issuance of local currency-denominated bonds by the Japan Bank
for International Cooperation (JBIC), World Bank, Asian Development Bank (ADB)
and the International Finance Corporation (IFC) in Malaysia, Thailand, China,
and the Philippines. |
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Information dissemination through
the
Asian Bonds Online (ABO) at the ADB. |
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(Progress in the ABMI is outlined in the ABMI progress reports
which are submitted by the ABMI Working Groups. Those progress reports are
available at the
the Asian Bonds Online (ABO) .) |
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At the 10th ASEAN+3 Finance Ministers’ Meeting in May 2007
(Kyoto, Japan), finance ministers endorsed undertaking of the following new
studies: Exploring New Debt Instruments for Infrastructure Financing, Promotion
of Securitisation of Loan Credits and Receivables, and Promotion of Asian Medium
Term Note (MTN) Programme.
(Joint Ministerial Statement of the Tenth ASEAN+3
Finance Ministers’ Meeting)
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4. Research Group |
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Objective |
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The Research Group was proposed
by Japan at the Informal ASEAN+3 Finance and Central Bank Deputies’ Meeting in
November 2002, and agreed among ASEAN+3 in August 2003.The Research Group aims
to explore the ways to further strengthen financial cooperation and promote
financial stability in the region by soliciting academic input from researchers
and research institutes in ASEAN+3 countries. (Reports
of ASEAN+3 Research Group [2003/2004 – 2005/2006], all reports are available
at the official
website of the ASEAN Secretariat) |
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Research Themes |
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In 2006/07: |
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(1)
(2) |
Toward
Greater Financial Stability in the Asia Region: Exploring Steps to Create
Regional Monetary Units
Financial Conglomeration in the East Asian Region: Recent Trends and
Implications for Regional Financial Market Development
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New themes for 2007/08: |
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(1)
(2) |
Development
of Database on Corporate Credit Information
Development of Capital Market to Widen and Diversify Small-Medium Enterprises (SME)
Financing in the East Asian Region |
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5. Monitoring of Short-Term Capital Flow |
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At the 4th ASEAN+3 Finance Ministers’ Meeting in May 2001 (Honolulu,
USA), finance ministers agreed to exchange data on capital flows bilaterally
among ASEAN+3 on a voluntary basis to facilitate effective policy dialogue.
Japan has been exchanging data with the Republic of Korea, the Philippines,
Thailand, Indonesia, and Viet Nam.
(Joint Ministerial Statement of the Forth ASEAN+3 Finance Ministers’ Meeting) |
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[International Finance]