The Emergence of a Regional Financial Architecture in Asia

Abstract

This paper provides an assessment of monetary and financial cooperation in Asia since the regional financial crisis of 1997–98, with a view to determining whether the emerging Regional Financial Architecture in Asia is compatible with the global financial architecture and what are the prospects for possible economic and monetary union. Monetary and financial cooperation has focused on four architectural pillars (economic policy surveillance, crisis prevention, liquidity support, and bond market development), which can be consistent with the global architecture. However, progress toward full integration is likely to be gradual and experimental, given the lack of strong regional institutions, regional economic disparities, and the need to build political commitment to such a goal.