During the Asian financial crisis, Asian leaders had difficulties in dealing with both regional and international institutions such as the Association of Southeast Asian Nations (ASEAN) and particularly the International Monetary Fund (IMF). Countries such as Indonesia, Republic of Korea, and Thailand had to turn to bailouts from the IMF. However, the strict conditions of the IMF bailouts evoked discontent among Asian countries. This discontent was largely because Asian nations had little leverage on IMF crisis resolution measures despite the IMF being an international organisation. Another source of discontent was due to the financial volatility concerning the US dollar. More specifically, difficulties had arisen because for most of the 1990s, countries such as Thailand and Indonesia had largely implemented fixed exchange-rate systems with their currencies generally pegged to the US dollar. The proposal to establish an AMF led led to sharp disagreement between Japanese and United States officials because the US Treasury, which had not been consulted on the proposal, did not support the idea of creating an AMF. In the face of this opposition from the US and a reluctance to support it from China, the Asian Monetary Fund was never established.

Is there a reason why the U.S. did not support the idea of an Asian Monetary Fund? I am wondering if the implementation of an Asian Monetary Fund could have hurt U.S. interest, because I think Asian countries could have immensely benefited from it. Therefore, I am led to believe there were some major political reasons why the U.S. did not support it.

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    You say that Asian countries might have benefited from it. And then you argue that this would be in the interest of the USA. Is this really so? This would assume some level of altruism, wouldn't it? Jul 14, 2019 at 7:30
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    If Asian countries become richer, the U.S. stand to benefit too at least that's the idea that has been pushed by the U.S. for a very long time.
    – Sayaman
    Jul 14, 2019 at 12:17

1 Answer 1


Q: Why didn't the U.S. support the idea of an Asian Monetary Fund?

Briefly, IMF and United States hegemony.

According to the source cited in the Wikipedia article, Japan’s Asian Monetary Fund Proposal (Spring 2003), referencing Japanese Minister of Finance Sakakibara,

The US Treasury acted immediately after obtaining information on the AMF and actively opposed it. According to Sakakibara, then Deputy Treasury Secretary Larry Summers called him directly at his residence at midnight and angrily started, “I thought you were my friend.” During a heated two-hour conversation, Summers allegedly criticized the plan for excluding the United States and allowing for action autonomous of the IMF. Sakakibara believes the stringent American reaction was driven by its perception that Japan was posing a challenge to American hegemony in Asia through the AMF. The official line of the US Treasury focused on two key factors: Moral Hazard and Duplication. According to this line of argument, the AMF would create an unnecessary incentive for Asian countries to postpone adjustment and would add very little to the pre-existing system centered on the IMF.

In a later interview with Sakakibara, Looking back at the 'Asian IMF' concept, June 22, 2017,

What was the purpose of the AMF and why did it fail? At that time, the IMF didn't properly address the [1997 Asian financial] crisis. We were angry about that. That is why we planned to establish Asia's own version of the IMF. The ASEAN countries and South Korea supported the idea, but the U.S. didn't. The former U.S. Treasury Secretary Lawrence Summers strongly opposed it, because he foresaw it weakening America's financial influence in Asia.

  • Arguments about moral hazard didn't age well, considering what happened in the US in 2007-8!
    – Stuart F
    Feb 2 at 11:22

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