ABSTRACT
At the time of the 1997 East Asian financial crisis, Asian regionalism included a broad commitment to the global institutions of trade liberalization and financial cooperation. Subsequently, the bitter political reaction to the International Monetary Fund’s (IMF’s) crisis intervention contributed to a consensus that there was a need to deepen regional cooperation. In May 2000, bilateral swap arrangements among five Southeast Asian (ASEAN-5) economies 2 were enlarged and expanded to include bilateral swaps among ASEAN-5 and China, Japan and the Republic of Korea (the Plus-3 countries). This became known as the Chiang Mai Initiative, since it was agreed in Chiang Mai, Thailand. The aftermath of the closure of Lehman Brothers in late 2008, however, showed that despite relatively large foreign reserves, countries could experience sudden liquidity shortages. In May 2009, the Chiang Mai Initiative Multilateralization (CMIM) was announced. This time, all ten ASEAN economies 3 and the Plus-3 economies agreed to pool reserve swap facilities and decided that fundamental decisions, such as on the size of the pools, national contributions, borrowing sizes, membership and terms of lending, would be made on the basis of consensus at the minister of finance level (Sussangkarn 2011). In 2011, they agreed to establish the ASEAN+3 Macroeconomic Research Office (AMRO) as the surveillance unit of CMIM.
