SEOUL, KOREA – The 15th ASEAN+3 Finance Ministers and Central Bank Governors’ meeting held on May 3, 2012 in Manila, the Philippines, under the co-chairmanship of Korea’s finance minister, Bahk Jaewan and Cambodia’s finance minister, Keat Chhon, successfully concluded. The joint statement delivered multilateral agreements on the expansion of the Chiang Mai Initiative Multilateralization (CMIM) by two folds from US$120 billion to 240 billion, the introduction of the CMIM Precautionary Line, the enlargement of the IMF de-linked portion and the adoption of a new roadmap for the Asia Bond Markets Initiative (ABMI).
The size of the CMIM will double form US$120 billion to 240 billion, with each member country keeping the same share of financial contributions and voting power as it currently has. Korea will take US$38.4 billion, 16 percent of the CMIM.
The ASEAN+3 also agreed to adopt the CMIM Precautionary Line (CMIM-PL), designed to help the member countries prevent a crisis.
To strengthen the region’s ability to deal with a crisis, the IMF de-linked portion, an amount of CMIM allowed to be taken out without a link to IMF programs, will be raised from 20 percent to 30 percent with a view to increasing it to 40 percent in 2014 if conditions are met. The maturity period of the current CMIM, which will be called the CMIM Stability Facility (CMIM-SF) to distinguish it from the CMIM-PL, the prevention program, will be extended from 90 days to one year with two renewals, totaling up to 3 years if the CMIM-SF is linked to IMF programs, and if it is de-linked, the maturity period will be lengthened from 90 days to 6 months with three renewals, totaling up to 2 years.
Regarding the ABMI, the ASEAN+3 chose New Roadmap+ which Korea proposed. The roadmap covers directions to further develop the Asian bond markets. New Roadmap+ will be subject to periodical reviews every three years to reprioritize the agendas and introduce new issues.
The ASEAN+3 agreed on the importance of the regional financial cooperation in three areas, and they are infrastructure financing, disaster risk insurance and the use of local currencies for regional trade settlement.
