ABSTRACT
Introduction East Asian monetary integration has a long story. The Asian crisis of 1997 had shown the limits of a simple dollar-peg policy and of a market-driven regional integration without formal institutions. During the 2000s, much effort has been devoted to improve monetary and financial cooperation at the regional level, especially with the Chiang Mai initiative and the Asian Bond Market initiative. But results have been limited, mainly due to political issues with an underlying competition between China and Japan. The current financial crisis has given new interest to these questions of monetary cooperation at the regional level, as the decline of the US position and strengthening of China were observed at the world level. Due to the high heterogeneity of Asian countries, it appears necessary to preserve the possibility of exchange rate adjustments in a future monetary regime, at least for a long transition period. Various forms of monetary regime have been proposed from the Asian Currency Unit (ACU) to the common currency basket or the yen bloc, with improvement at the level of institutional forms, such as an Asian Monetary Fund and Asian bond markets. However, obstacles remain the same with a lack of political project and the will of China to preserve the autonomy of its monetary policy. A long transition period with adjustable exchange rates regime, based on a common currency basket or an ACU, might be the more likely, before the settlement of a yuan bloc.
