This paper examines the limitations of the Chiang Mai Initiative Multilateralization (CMIM) as a regional financial safety net in East Asia, and proposes a new regional financial arrangement. To overcome the drawbacks of the CMIM, which has never been activated so far, a new regional financial arrangement suggests that ASEAN+3 members establish a regional reserve system based on a supranational ...

East Asian Countries has developed the financial cooperation via CMIM, ABMI after the Asian currency crisis. Lee and Park 2014) and Rhee and Sumulong (2014) advocate the use of local currencies in trade settlements. The regional currency settlements will reduce the USD dependency in the regional economy, so it will promote financial stability in the region. But they might induce risks for Korean ...