Table of Contents

Towards Monetary and Financial Integration in East Asia

Towards Monetary and Financial Integration in East Asia

Edited by Koichi Hamada, Beate Reszat and Ulrich Volz

This indispensable book provides a comprehensive analysis of monetary and financial integration in East Asia. It assesses the steps already taken toward financial integration and brings forward different proposals for future exchange rate arrangements in what has now become the world’s most dynamic region.

Chapter 2: The Political Economy of European Economic and Monetary Union Negotiations and Implications for East Asia

Heungchong Kim

Subjects: asian studies, asian economics, economics and finance, asian economics, financial economics and regulation

Extract

Heungchong Kim1 INTRODUCTION 2.1 The financial crisis of 1997–98 in East Asia provided a valuable—though costly—lesson for the East Asian countries in the importance of regional cooperation. In the course of the developing crisis, East Asian countries observed that neighboring countries were not at all helpful because of the lack of cooperative facilities within the region, and they were shocked by the posture of mere observance adopted by the advanced countries. The East Asian countries realized that the remarkable economic growth they had achieved over the years was based on a house of cards. After the crisis had passed, various kinds of proposals for regional economic cooperation, to strengthen economic stability as much as economic growth, were discussed and developed in East Asia, including the Chiang Mai Initiative, a burgeoning number of regional free trade agreements (FTAs), potential East Asian bond markets, and so on. While trying to develop proper institutions and tools for regional economic cooperation, it is strongly recommended that East Asia take an interest in the European economic integration process, investigate Europe’s past experiences, and creatively adapt them to East Asia’s circumstances and needs. The creation of Economic and Monetary Union (EMU) in Europe with the introduction of the euro is a good example of economic and monetary integration that East Asia could follow. An examination of the competing views among the European Union (EU) member states on the path to monetary integration and how they were subsequently resolved provides important insights for East...

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