Getting the world's crisis funds to work closer together

THE Latin American debt crisis in the 1980s, the Asian financial crisis 20 years ago, the euro crisis earlier this decade: they led to reforms and policy adjustments, and resulted in the creation of regional crisis funds. Today in Singapore, the first ever research seminar of the regional institutions contributing to fighting financial crises around the world will take place.

While the International Monetary Fund (IMF), at the centre of the international monetary system, is without a doubt the best-known firefighter to help governments that are in trouble during a crisis, it is no longer the only one. Today, a large part of the world is also covered by so-called regional financing arrangements (RFAs) to mobilise additional financial resources for the countries facing temporary liquidity problems during a crisis. There are eight such backstops across the world, and they are all lenders for governments.

One such arrangement is the Chiang Mai Initiative Multilateralisation (CMIM), the agreement that evolved from a system of currency swaps among economies in East Asia after the 1997 Asian financial crisis. Its surveillance arm, the Asean+3 Macroeconomic Research Office, or Amro, is based in Singapore.