| The establishment of APEC (Asia Pacific Economic Cooperation) in 1989 promoted intra regional trade and investment amongst the 18 member economies, but there were only ancillary discussions on monetary cooperation. In February 1991, nevertheless, Asian monetary cooperation took a quiet but significant step forward with the creation of EMEAP (Executives’ Meeting of East Asia Pacific Central Banks). The Bank of Japan initiated this 11-member group of central banks. The Asian financial crisis of 1997 demonstrates the need for a region-wide monetary architecture to forewarn the impending currency and balance of payment problems in Thailand, Malaysia, Indonesia and Korea. The emergence of regional initiatives – the proposed Asian Monetary Fund by Japan, the Chiang Mai Initiatives at the ASEAN+3 meeting in May 2000, the Kobe Research Project, and the currency swap agreements and surveillance mechanism at the Asian Development Bank Meeting in Honolulu in May 2001 ( Peter Wilson,2002) support the view that an Asian Monetary Authority has a vital role in the promotion of regional monetary coordination, macroeconomic surveillance and future financial crisis prediction. |