Finance ministers of Asian countries agreed Wednesday to intensify their cooperation in staving off Asia-wide financial turmoil by taking preemptive crisis prevention measures, Seoul officials said.
The agreement, which was made during a meeting in Hanoi, Vietnam, focuses on strengthening the role of a regional financial safety net under the Chiang Mai Initiative Multilateralization (CMIM), the Ministry of Strategy and Finance here said.
The meeting was attended by finance ministers of the 10-member Association of Southeast Asian Nations (ASEAN) plus South Korea, Japan and China, referred to as "ASEAN Plus Three" countries.
The CMIM refers to the money pool formed in March last year that can be tapped through currency swap deals in times of financial crisis. It was launched as ASEAN Plus Three countries agreed to set aside US$120 billion to prevent financial turmoil in Asia.
Demand has been growing for its role to be expanded to crisis prevention as member nations currently can ask for its help only when financial turmoil actually unfolds.
The finance ministers agreed to pursue cooperation with the International Monetary Fund to explore ways to provide emergency liquidity in a preemptive way even to a country that shows signs of slipping into a financial crisis.
"We shared the view that, under the current global financial environment, crisis takes place on a global scale and it spreads in a short period of time. It has demonstrated the importance of crisis prevention measures to deter contagion," the ministers said in a statement.
"Considering that the regional financial arrangement needs to be adapted to this new environment, we instructed the deputies to initiate a study on the design of a possible crisis prevention function for CMIM," they added.
During an earlier meeting with his counterparts from Japan and China, South Korea's Finance Minister Yoon Jeung-hyun emphasized the importance of establishing a regular dialogue channel with the IMF for stepped-up cooperation, while calling for the doubling of the CMIM money down the road, according to Seoul officials.
The finance ministers also agreed to conduct a study to establish what they called the "regional settlement intermediary (RSI)" as part of ongoing efforts to boost the Asian Bond Markets Initiative. The RSI is designed to offer settlement service for cross-border bond transactions in the region.
