Regional monetary and financial cooperation for crisis prevention and management: East Asia vs the EU

Abstract

This chapter reviews past episodes of currency and financial crises to shed light on the different types of assistance provided by the International Monetary Fund (IMF) and regional financial arrangements (RFAs). It is shown that there are significant differences in the role of the IMF in past crisis episodes. In the case of the Asian currency crisis, the financial assistance provided by the IMF was insufficient for the crisis management. Subsequent regional currency swap arrangements are reviewed and it is suggested that more cooperative measures in East Asia are needed. In the Eurozone crisis, the IMF worked closely with the European Commission and the European Central Bank under the Troika, although the role of the IMF was relatively minor in terms of the quantity of financial assistance. The chapter argues that further consideration of coordination between the IMF and the RFAs is necessary.