This report examines how financing arrangements have evolved in Asia to help safeguard the region from financial crises. The 19971998 Asian financial crisis and the 20072008 global financial crisis highlighted the need for global and regional financial safety nets to safeguard financial stability and enhance resilience to future crises. Over the past decade, Asian economies have made progress in establishing financing arrangements to strengthen the region's financial safety net. These arrangements have enhanced regional macroeconomic and financial surveillance, strengthened crisis management, and bolstered cooperation for financial stability and resilience. The report examines the evolution and the toolkits of regional financing arrangements and assesses the Asian Development Bank's role in providing crisis response mechanisms through its policy-based lending facilities.

"To the extent that financial contagion from the United States and the euro area crisis has occurred in Asia, this paper focuses on the importance of strengthening the regional financial safety nets. By conjecturing that efforts to prevent and manage a crisis are the essence of providing such safety nets, the author argues that efforts made by ASEAN+3 officials, especially in the provision of liquidity support during a crisis, are far from adequate. The collapse of Lehman Brothers in the autumn of 2008 could be a game-changer in the global financial market, making the probability of financial contagion higher than ever before. Even with improved financial conditions and stronger regulations in ASEAN+3 member countries, contagion can and will strike. Making the Chiang Mai Initiative Multilateralization more effective is therefore urgent and critical."--Abstract.

Several East Asian countries, in the aftermath of the global financial crisis, are considering an expansion of their social safety net programs. In many cases, existing delivery mechanisms for social assistance in the region tend to be basic, in line with the small size of programs. In a context of coverage expansion and proliferation of new programs, the risk of creating increasingly complex systems characterized by cross-incentives is high. Lack of coordination, ambiguous criteria for identifying and selecting beneficiaries, low administrative capacity, lack of transparency and limited beneficiary participation pose risks for program effectiveness and can decrease accountability. Good governance can improve program outcomes through effective program coordination, stronger accountability arrangements, provider incentives and greater transparency and participation. This paper proposes an analytical framework to systematically identify governance risks and constraints which, if removed, could improve the outcomes of modern social assistance programs.

The Asian financial landscape has grown more interconnected over the past 2 decades. Previous financial crises have shown how financial volatility can transmit rapidly across an interconnected financial network. Empirical analyses have shown, moreover, how financial volatility can reverberate across the macroeconomy. This report summarizes the lessons from past crises, reviews the evidence of the macrofinancial linkages and feedback effects of financial distress, and proposes policy considerations and coordinated responses to enhance financial stability and resilience.

Asian economies continue to be subject to new shocks: US monetary policy tightening, the adoption of negative-interest-rate policies by central banks all over the world, the slowdown of the People's Republic of China, and the sharp drop in oil and other commodity prices. All these highlight the vulnerability of the region to volatile trade and capital flows even as the global and Asian regional financial architecture evolves. This volume analyzes the vulnerabilities of Asian economies to external economic and financial shocks and assesses the performance of Asian regional institutions in financial surveillance and cooperation. It also evaluates ongoing reforms of the global financial architecture, including the International Monetary Fund (IMF), the Financial Stability Board, and reviews the experience of the "Troika" (European Commission, European Central Bank, and the IMF) in managing the European sovereign debt and banking crisis. Based on these, the book develops valuable recommendations to strengthen the Asian regional financial architecture and improve cooperation with global multilateral institutions.

Rapid globalization and digitalization have transformed the financial landscape of ASEAN+3—the Association of Southeast Asian Nations (ASEAN) and the People’s Republic of China, Japan, and the Republic of Korea. Despite impressive reforms, the region faces continued challenges. These include deepening corporate bond markets, coping with cross-border bank concentration risk, reducing dependence on the United States dollar, achieving sustainable infrastructure investments, addressing pension issues, and supporting fintech development. This edited volume highlights the potential for stronger regional financial cooperation to address such challenges. It explores how regional financial cooperation could promote greater financial resilience and stability amid rapid economic and financial development and technological change.

High and persistent levels of nonperforming loans (NPLs) have featured prominently in recent financial crises. This book traces NPL trends during and after crises, examines the economic impact of high NPLs, and compares the effectiveness of NPL resolution strategies across economies in Asia and Europe. The book distills important lessons from the experiences of economies using case studies and empirical investigation of ways to resolve NPLs. These findings can be invaluable in charting a course through the financial and economic fallout of the coronavirus disease (COVID-19) pandemic to recovery and sustained financial stability in Asia, Europe, and beyond.