Yes, that’s what Bloomberg’s William Pesek suggests we might see evolving. As Pesek notes, the creation of an Asian Monetary Fund would:
“have major consequences for the global elites and the so-called “Washington Consensus” on how developing nations should go about raising living standards for their swelling and often poor populations.”
In particular, if this came off, not only would we be talking about a European social model, we would also be looking at an Asian one.
Certainly the idea makes sense. All those current account surpluses mean that there is bags of liquidity knocking around to try to underpin growth and guarantee financial stability.
The recent dispute between China and Japan places a question mark over the political viability of such a fund in the short term, but against this could be placed the attraction for China of having a support line outside Washington in the event of financial instability following a currency float.
As Pesek explains:
“Fueling speculation the Asian Monetary Fund is back was a statement by a top Asian Development Bank (ADB) official that currency-swap arrangements agreed to by the region have “the potential to become an Asian monetary fund.” That it was made by Masahiro Kawai, an adviser to ADB President Haruhiko Kuroda, made it all the more significant.
Japan was arguably the most vocal advocate of an IMF-like organization for Asia, and Kuroda is a former vice finance minister. To connect the dots a bit, Kuroda plans to use his time at the ADB to accelerate the economic integration and self- sufficiency of Asia. An Asian Monetary Fund seems a natural step in that direction.”
As he also wrly notes: ” Taken together, these steps will not only move Asia further down the path of integration, but also reduce its reliance on the dollar. It means U.S. fears of Asians dumping Treasuries to bring the money home may have just gotten a little more real.