ravi menon : regional safety nets to complement global safety nets welcome remarks by mr ravi menon, managing director of the monetary authority of singapore, at the opening ceremony of the asean + 3 macroeconomic research office ( amro ), monetary authority of singapore, singapore, 31 january 2012. * * * director, amro, wei benhua, counselor, amro, yoichi nemoto, head, civil service and permanent secretary ( finance ) peter ong, distinguished guests, ladies and gentlemen. good morning. genesis of the chiang mai initiative 1. twelve years ago, we took the first steps in a momentous journey that has led us here today. 2. it was the aftermath of the asian financial crisis. the crisis had ravaged several economies in the region and was a wake - up call to all of us. rapid economic growth was not enough. to sustain growth and foster stability, sound macroeconomics and strong financial supervision mattered. asian economies had to get their domestic acts together. and they did, with painstaking reforms over the last 15 years. so, when the global financial crisis hit asia in 2008 / 2009, asian economies were shaken, but did not keel over. 3. the crisis taught us another lesson : had the region better harnessed the resources it had available, it might have been in a stronger position to deal with the crisis. it was this conviction that provided the impetus for the first proposals for a regional financing arrangement. 4. and so, in may 2000, the finance ministers of asean + 3 gathered in the idyllic city of chiang mai in the highlands of northern thailand, to discuss the establishment of a network of bilateral swap agreements. thus was born the chiang mai initiative. by october 2003, thirteen bilateral swap agreements had been successfully concluded, with a combined total size of roughly us $ 35 billion. 5. in may 2007, asean + 3 finance ministers agreed to transform these bilateral agreements into a multilateral agreement that would also provide a platform for mutual surveillance and dialogue. the chiang mai initiative multilateralisation, or cmim, thus came into being in march 2010, with a war chest of us $ 120 billion. the cmim operates as a common us dollar liquidity pool. a member state facing balance - of - payments or external liquidity problems can swap its local currency for us dollars from this pool. the size of the swap can be up to a fixed multiple of its contribution. 6. today marks another important milestone in that journey – the opening

the journey of regionalism as represented by the cmim is an ongoing one. today ’ s official opening of amro is an important milestone in that journey that we can all take pride in. on behalf of my colleagues in asean + 3, i would like to congratulate amro and its director, mr wei benhua, on your strong start and wish you every success. let me also extend our warm wishes and full support to mr yoichi nemoto, who will take over from mr wei as amro director later this year. 26. ensuring amro ’ s success is a shared responsibility. let us work together to make amro a strong and credible institution, reputed around the world for its expertise in the economic affairs of our region. 27. thank you. bis central bankers ’ speeches