Reform of the International Financial Architecture: An Asian Perspective

Abstract

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Transmission of US financial and trade shocks to Asian economies: Implications for spillover of the 2007–2009 US financial crisis

“…Especially, because financial markets involving the US and Asian countries are highly integrated, the US financial shock will immediately spread to Asian financial markets. Therefore, policymakers should predict financial conditions of the US 14 Based on lessons from Asian financial crisis of 1997 and the recent US and global financial crisis, Fukuda (2009) and Kawai (2010) proposed the financial architecture of a stabilized financial system in Asia. …”

Regional and Global Monetary Cooperation

“…This kind of capability was strongly advocated by the Government of Korea at the G20 Seoul Summit of 2010 (SaKong 2010), but this understandably has met strong resistance from the IMF and other potential lenders because of concerns about moral hazard in the absence of conditionality. Similar proposals have been made by Fernández-Arias and LevyYeyati (2010) and Kawai (2009a). The most practical approach for achieving this is to move increasingly toward prequalification.…”

“…Such coordination also requires practical innovations. The suggestion by Kawai (2009a) to include RFA members in IMF Article IV assessment missions is a step in the right direction.…”

Financial Safety Nets in Asia: Genesis, Evolution, Adequacy, and Way Forward

“…It should avoid the temptation to give in to mission creep and focus on core functions, particularly surveillance activities. For instance, recent suggestions that AMRO should introduce a Regional Monetary Unit (Kawai 2010;Rana et al 2012) are premature and could derail the building of core competencies. There is room for specialization and collaboration, and more specialized functions such as these should be left to other institutions.…”