Inadequate Regional Financial Safety Nets Reflect Complacency

Iwan J. Azis
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Iwan J. Azis: Asian Development Bank Institute (ADBI)

Governance Working Papers from East Asian Bureau of Economic Research

Abstract: To the extent that financial contagion from the United States and the euro area crisis has occurred in Asia, this paper focuses on the importance of strengthening the regional financial safety nets. By conjecturing that efforts to prevent and manage a crisis are the essence of providing such safety nets, I argue that efforts made by ASEAN+3 officials, especially in the provision of liquidity support during a crisis, are far from adequate. The collapse of Lehman Brothers in the autumn of 2008 could be a game-changer in the global financial market, making the probability of financial contagion higher than ever before. Even with improved financial conditions and stronger regulations in ASEAN+3 member countries, contagion can and will strike. Making the Chiang Mai Initiative Multilateralization more effective is therefore urgent and critical.

Keywords: Financial Safety Nets; regional; ASEAN+3; financial contagion; Chiang Mai Innitiative (search for similar items in EconPapers)
JEL-codes: F15 F32 F33 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-cba
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