ASEAN swap plan needs $20b

ASEAN swap plan needs $20b

BANGKOK (Dow Jones): The Association of Southeast Asian Nations (ASEAN) needs to greatly increase the scope of its currency swap plan with its northern neighbors, China, South Korea, and Japan, for it to work, Japan's former Vice Finance Minister for International Affairs Eisuke Sakakibara said Wednesday.

Speaking ahead of the Asian Development Bank's annual meeting this weekend, Sakakibara noted that the proposed figure of $200 million for the swaps plan was too small.

"We need to have at least $20 billion," he said. "Then it will be quite effective."

ASEAN is seeking to set up a currency swaps program with China, South Korea, and Japan to build a pool of foreign exchange reserves that could be used to fight off speculative attacks on currencies in the region.

Separately, Sakakibara reiterated his support for the creation of an Asian Monetary Fund, which would act as a lender of last resort during economic crises in the region.