Law, Trade and Finance
Edited by Ross P. Buckley, Richard Weixing Hu and Douglas W. Arner
Chapter 12: Beyond the Multilateralized Chiang Mai Initiative: An Asian Monetary Fund
Ross P. Buckley In the preceding chapter, Paul Lejot explained the current state of play of the Multilateralized Chiang Mai Initiative (CMIM) and perspicaciously analysed its institutional incompleteness. Perhaps its greatest inadequacy at the moment is its scale. If the CMIM is to deter contagion and serve to reassure markets, for all the reasons Lejot identifies, its scale needs, in my view, to be increased substantially. So today the CMIM’s potential impact is limited. This is reinforced by the requirement that 80 per cent of the amounts available for drawing thereunder are not available unless a participant has an IMF program in place (because the CMIM has but rudimentary surveillance and technical capacity of its own). Given that the negotiation of IMF programs typically requires months, this further limits the potential of the credit lines to calm panics and deter contagion. However, another perspective is available on the CMIM when one asks where it might lead. As Lejot has so ably established, the initiative is incomplete and must be developed further or in time will fail. How it might be developed, and where it might lead, are the topics of this chapter. Or, in the words of Lejot, a cautious author, he has built the structure of the high diving platform and left it to me to dive off. BACKGROUND AND CONTEXT Before moving on to those two issues, however, some background and contextual analysis might assist. ASEAN comprises ten countries: Brunei, Cambodia, Indonesia, Malaysia, Laos, Myanmar, the Philippines, Singapore,...
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