MADRID, May 4 (Xinhua) -- Finance ministers of China, Japan and South Korea took one step further on Sunday towards a regional foreign exchange reserve swap arrangement.

    "We reached an agreement on several key elements of the CMI Multilateralization," finance chiefs of the three East Asian countries said in a joint statement after they met on the sidelines of an annual meeting of the Asian Development Bank (ADB).

    The CMI, or the Chiang Mai Initiative, is a regional financing arrangement agreed by finance ministers of ASEAN (Association of Southeast Asian Nations), China, Japan and South Korea in 2000 to prevent a recurrence of the 1997-1998 Asian financial crisis.

    Under the scheme, the central banks of participating countries can swap foreign exchange reserves to counter speculative moves on their currencies.

    CMI Multilateralization is the next step, as has been agreed at the last finance ministers' meeting of ASEAN and three East Asian countries in Japan's Kyoto last year, which would be moving from the bilateral system to a multilateral one.

    The proposal holds that by setting up a common pooling reserve, in which each country would input an amount of foreign reserve under a single agreement, any country in the framework could draw from the fund to cope with short-term liquidity difficulties.

    "We agree to further expedite our efforts to reach consensus onall of the elements of CMI Multilateralization, particularly through the enhanced internal discussion among the three countries," the statement said.

    Shin Je-yoon, vice finance minister of South Korea, told reporters after the meeting that the pool would be upgraded to at least 80 billion U.S. dollars, with 80 percent of the amount to be contributed by Japan, China and his country.

    A broad deal was expected to be agreed when finance ministers of China, Japan and South Korea are joined later today by their counterparts from the 10 member countries of the ASEAN under the framework called ASEAN+3.

    Finance ministers of China, Japan and South Korea also agreed to continue support for the Asian Bond Markets Initiative (ABMI), aiming at the development of bond markets in the ASEAN+3 countries.

    "We believe that the ABMI has contributed to recent bond market developments in the region both by accelerating market reform of each country and stimulating policy cooperation among the ASEAN+3 countries," the three finance chiefs said in the statement.

    The meeting was held amid ongoing financial turmoil and an economic slowdown in the United States, which posed serious downturn risks to the East Asian economies.

    "The regional economy is not entirely immune from the global economic slowdown in the midst of increasing potential downside risks looming in the world economy," the finance ministers said, pledging to enhance cooperation to secure financial stability.

    "We recognized the need to closely monitor potential risks and promote cooperation of information sharing, extended working level meetings and deeper understanding on the macroeconomic and financial situation in the three countries," they said.

    However, they noted economic growth in the region continued to be solid so far.