Does E ast A sia Have a Working Financial Safety Net?

Financial safety nets in A sia have come a long way since the A sian financial crisis ( AFC ) of 1997/1998. With Asian countries not wanting to rely solely on the IMF again, the C hiang M ai I nitiative ( CMI ) was created in 2000. When the CMI also proved inadequate following the global financial crisis, it was first multilateralized ( CMIM ), and then doubled in size to US $240bn, while the IMF de‐linked portion was increased to 30 percent of the available country quotas. A surveillance unit, the ASEAN +3 Macroeconomic Research Office, was set up in 2001. These are impressive developments, but are they enough to make the CMIM workable? Without clear and rapid‐response procedures to handle a fast‐developing financial emergency, we argue that it is unlikely that the CMIM will be used even as a complement to the IMF . To serve as a stand‐alone option, however, its size or the IMF de‐linked portion of funds needs to be further increased, as does its membership, to add diversity. Only if the ASEAN +3 Macroeconomic Research Office can develop into an independent and credible surveillance authority would it then perhaps be in a position to lead the next rescue.