KYOTO, May 4 (Xinhua) -- Finance Ministers of China, Japan and South Korea pledged to strengthen financial cooperation here on Friday at their 7th trilateral meeting.

    "We discussed and welcomed progress made on regional financial cooperation under the ASEAN-plus-3 Finance Ministers' Process, and reaffirmed our commitment to continue close cooperation," said a joint message released after the meeting, which was held on the sidelines of the 40th annual meeting of the Asian Development Bank in the Japanese ancient capital.

    "We were pleased to see that the total amount of the current bilateral swap arrangement under the Chiang Mai Initiative (CMI) continues to increase, and welcome the progress of the study towards an advanced framework of regional liquidity support arrangement (CMI multilateralization or Post-CMI)," the message said.

    The three ministers said they agreed to further strengthen efforts to jointly explore ways for CMI multilateralization while confirming commitment to maintain the two core objectives of the CMI, in specific to address short-term liquidity difficulties in the region and to supplement the existing international financial arrangements.

    The three ministers are Jin Renqing of China, Koji Omi of Japan and Kwon O-kyu of South Korea.

    They also agreed to work collectively to push forward the development of the Asian Bond Markets Initiative or ABMI, which they believed has facilitated the diversification of issuers and types of local currency-denominated bonds.

    "We reaffirmed the importance of the ABMI in order to enhance sustainable economic development in the region by channeling its abundant savings to the efficient investment," their joint message read.

    The ABMI aims to develop efficient and liquid bond markets in Asia, enabling better utilization of Asian savings for Asian investments. It would contribute to the mitigation of currency and maturity mismatches in financing.

    The three ministers said they were satisfied with their past cooperation and the success of the fruitful 7th meeting, adding that they agreed to further strengthen the policy dialogue and cooperation through the Trilateral Finance Ministerial Process in the future.  

    Backgrounder: Chiang Mai Initiative

    KYOTO, May 4 (Xinhua) -- Finance Ministers of China, Japan and South Korea concluded their 7th trilateral meeting on Friday afternoon in the Japanese ancient capital of Kyoto, where they pledged to further strengthen financial cooperation and work for the multilateralization of the Chiang Mai Initiative.

    Following is the background of the Initiative:

    In May 2000, finance ministers of ASEAN, China, Japan and South Korea agreed to establish a regional financing arrangement called the "Chiang Mai Initiative" or CMI, named after the meeting venue, to swap foreign exchange reserves when necessary to fight against speculative attacks on their currencies.

    The initiative was aimed at preventing a recurrence of the 1997-1998 Asian financial crisis.

    The CMI has two components: an expanded ASEAN Swap Arrangement (ASA) and a network of bilateral swap arrangements among ASEAN countries, China, Japan and South Korea.

    The ASEAN Swap Arrangement of ASA preceded the regional financial crisis. ASA was originally established by the ASEAN central bank and monetary authorities of the five founding members of ASEAN with a view to help countries meet temporary liquidity problems. An expanded ASA now includes all then ASEAN countries with an expanded facility of 2 billion U.S. dollars.