Plan to Put Up Asian Monetary Fund Backed

Article excerpt

MANILA, (AP) - The Asian Development Bank said Friday there is a need to seriously consider setting up an Asian Monetary Fund for the region.

In a report on the financial market challenges Asia faces, the Manila-based development bank said the establishment of an Asian Monetary Fund could promote self-help within the region, address regional development issues and boost confidence in crisis-affected countries.

Although the report was compiled last year, its release comes amid a growing debate on the role of multilateral banks, and specifically whether the World Bank should pull out of Asia and let the ADB be the main agency providing developing countries in the region with loans to alleviate poverty.

The ADB said other regional efforts that should be considered to prevent a recurrence of Asia's 1997-1998 crisis include establishment of regional funding and guarantee facilities, and a regional exchange-rate stabilization fund aimed at damping the effects of currency contagion.

The ADB noted that the International Finance Corp., the investment arm of the World Bank, has set up a fund to invest in distressed Asian companies, and the ADB itself has established a dlrs 3 billion Asian Currency Crisis Support Facility financed by the Japanese government under the dlrs 30 billion Miyazawa Fund. …