S Korea To Expedite Talks On $80 Bln Fund

(RTTNews) - South Korea, China, Japan and the Association of Southeast Asian Nations (ASEAN) countries are set to expedite the creation of an $80 billion fund — the Asian version of the International Monetary Fund (IMF) — to help protect Asia from the global financial turmoil, South Korean Deputy Finance Minister Shin Je-yoon said in Seoul Sunday.

The Strategy and Finance Ministry said deputy finance Ministers from the three countries will meet next Monday on the sidelines of the IMF’s annual meeting in Washington.

The finance Ministers of these three countries agreed on a regional foreign reserve swap scheme in May under which China, Japan and South Korea will contribute $64 billion, accounting for 80 percent of the pool, while the 10 members of ASEAN will make up the rest.

The swap deal will replace the existing arrangement of mainly bilateral currency swaps, called the Chiang Mai Initiative (CMI) and transform it into a more powerful self-managed reserve pooling mechanism governed by a legally binding single contract.

The talks on this have been deadlocked over disputes on how to divide shares and on the decision-making process. The finance ministers were supposed to meet again in May next year to discuss details, but the vice-ministers will meet next week to discuss advancing the Ministerial talks in view of the Wall Street financial meltdown now affecting Europe, a Ministry spokesman said.

Shin Je-Yoon said the three-nation Ministerial talks should resume “as early as possible” to finalize details.

“It is necessary for the three countries to actively cooperate as U.S. financial turmoil may spread to the real economy,” he said. “The speed-up in discussing the $80 billion fund would have a preventive effect.”

President Lee Myung-Bak Friday called for the finance Ministers of the three countries to discuss closer coordination against global financial turmoil. He warned that the U.S. financial crisis was showing signs of spreading globally and depressing the entire world’s real economy.

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Posted in Categories: Economy, Eurozone, Japan, Releases, USA.

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