Policy: Text: Rubin on Agreement on Financial Cooperation in Asia
At the meeting an agreement was reached on a framework for regional cooperation to promote financial stability and on a set of proposals to improve the International Monetary Fund's capacity to respond effectively to financial crises.
Text of Secretary Rubin's Statement
We welcome the announcement in Manila today of the results of the meeting on financial cooperation in Asia, attended by the Finance and Central Bank Deputies of fourteen governments, including the United States. The representatives agreed on a framework for regional cooperation to promote financial stability and on a set of proposals to strengthen the IMF's capacity to respond effectively to financial crises. The United States strongly endorses these proposals, which will assist the countries of the region in meeting successfully the challenges of financial globalization.
I would also note the importance we attach to the statement in Manila that the region's strong economic fundamentals provide a basis for confidence that the region will return to robust growth and can continue to benefit from globalization, and that recent market turmoil has not altered the consensus that open capital markets bring significant benefits to an economy.
Finally, I would like to emphasize most strongly that the active role we played in shaping this agreement reflects the importance of Asia to the economic and strategic interests of the United States.
Fact Sheet and Summary of Manila Discussions
The "New Framework for Enhanced Asian Regional Cooperation to Promote Financial Stability," announced by Deputies at the conclusion of their two-day meeting, includes the following main components:
-- A mechanism for regional surveillance to complement global surveillance by the IMF;
-- Enhanced economic and technical cooperation, particularly in strengthening domestic financial systems and regulatory capacities;
-- Measures to strengthen the IMF's capacity to respond to financial crisis, including through exploration of new mechanisms in light of globalization of financial markets and the increased scale of private capital flows; and
-- A cooperative financing arrangement that would supplement IMF resources.
Under this cooperative financing arrangement, countries would agree to consider, in consultation with the IMF and on a case-by-case basis, the provision of supplemental financial resources for IMF-supported programs. Such support could be extended in exceptional circumstances to augment a country's reserves after making use of the resources made available by the IMF, which as a first recourse should take full advantage of the flexibility provided under the exceptional circumstances clause and any new financing mechanisms. This represents a significant signal of the importance of effective cooperation in the region, while preserving the central role of the IMF in responding to financial crises.