There are clear signs that in the aftermath of the financial crisis East Asian countries are moving towards regional regulation of finance. Given the fact that the economic volume of the East Asian countries is comparable to that of the United States or the European Union, the question arises whether regionalism is intended to replace the multilateral regulatory regime for international finance. If not, how far will it go?

On this basis, this chapter first summarises the move towards a regional arrangement for the regulation of finance. It further examines the deeply-rooted reasons for such move in East Asia, such as political motivations and economic interdependence. It then explores the legal characteristics of the initiatives for institutionalisation by comparing the emerging arrangement with the European monetary system. It finally assesses regionalism and its impact on existing multilateralism.

Introduction

In parallel with the deepening of the globalisation process, regionalism has come to the fore of the international trade and finance regulation. The conclusion of NAFTA established regionalism in North America. The launch of the euro marked the new height of European economic integration. East Asia is no exception. The countries in this region accelerated the pace of regional integration in the fields of trade and finance.

In this respect, it is worth noticing that East Asian regionalism has proceeded much faster in matters of finance than in respect of trade. East Asian countries are moving towards a regional regulatory regime for finance.