Effectiveness of Regional Mechanisms for Multilateral and Regional Governance
Regional measures taken after the Asian financial crisis to mitigate risk and crisis can support international organizations’ efforts.
The Asian financial crisis of 1997–1998 revealed that Asia should have its own regional mechanism to mitigate systemic risk and crisis contagion. This resulted in the formation of several regional organizations, including the ASEAN+3 Macroeconomic Research Office (AMRO), the Southeast Asian Central Banks Research and Training Centre (SEACEN), and the Executives’ Meeting of East Asia-Pacific Central Banks (EMEAP). AMRO supports regional macroprudential schemes and provides macroprudential surveillance and assistance in financial crisis resolution. Given its small size and lack of authority to enforce its policy recommendations, AMRO is not in a position to replace the dominance of international organizations with more ample resources in resolving financial crises. AMRO can be more effective in early warning than in crisis resolution. SEACEN provides training to central bankers, research on central banking, and fosters networking among members. Its work contributes indirectly to macroprudential schemes through upgrading the capabilities and relationships of members’ central banking staff. SEACEN could become more effective if it streamlined its work focus and collaborates more with other organizations. EMEAP organizes meetings for governors and deputy governors of its members’ central banks to dialogue and exchange ideas. These meetings have indirect and long-term benefits as they help to enhance regional macroprudential schemes by fostering relationships and interactions among the top decision makers. EMEAP could become more effective if it became more transparent. Due to the nature of the work objectives and/or small sizes of these regional organizations they should supplement rather than replace the existing international organizations.