Lejot, Paul --- "Institutional Completeness in the Chiang Mai Initiatives" [2011] ELECD 473; in Buckley, P. Ross; Hu, Weixing Richard; Arner, W. Douglas (eds), "East Asian Economic Integration" (Edward Elgar Publishing, 2011)

Book Title: East Asian Economic Integration

Editor(s): Buckley, P. Ross; Hu, Weixing Richard; Arner, W. Douglas

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781849808682

Section: Chapter 11

Section Title: Institutional Completeness in the Chiang Mai Initiatives

Author(s): Lejot, Paul

Number of pages: 32

Extract:

11. Institutional completeness in the
Chiang Mai Initiatives
Paul Lejot

INTRODUCTION

The Multilateralized Chiang Mai Initiative (CMIM) announced in 2009
is an emergency credit agreement made by ASEAN+3 finance ministers
and central bank governors.1 Their use as counterparties is practical
since they often have day-to-day control of foreign currency reserves
and domestic monetary policy.2 It also has tactical value in keeping with
accepted practice, by allowing disclosure of no more than the headlines
of the agreement. Although rooted in Asia's experience of receiving IMF
credit in the regional financial crisis of 1997­98, CMIM is not institu-
tionally developed in consisting of rules of the detail associated with
IMF practice for credit, surveillance or the obligations of members. It
represents an advance in technical and policy collaboration within the
region but of a kind not customary among OECD central banks since
1999.
An agreement to create CMIM was executed on or around 28 December
2009 and took effect on 24 March 2010. The undisclosed document com-
prises 24 articles and nine schedules but may resemble a commercial heads
of agreement,3 leaving the exact nature of credit and reserve pooling
commitments and any single transaction to be agreed and executed later.


1 Including also the head of the Hong Kong Monetary Authority (HKMA);

See Table 11.1. See Joint Press Release [of CMIM member central banks], `Chiang
Mai Initiative Multilateralization Comes Into Effect', 24 March 2010, accessed 2
September 2010, http://www.bot.or. ...