Since its establishment in 1991, EMEAP activities have evolved gradually but steadily. This short note gives a brief history of EMEAP, its present activities, and possible direction of its future evolution.


Brief History of EMEAP

         EMEAP's evolution to date is better understood if we divide its history into two periods: an initial period from 1991 until 1996 which saw the nurturing of relationships among members and then a second period from 1996 until the present following the establishment of Governors' Meeting and working/study groups. In the first period, EMEAP held, on an informal and confidential basis, Executive-level meetings twice a year to discuss information and ideas concerning economic and financial developments in the region. This initial six-year period helped foster closer cooperation among member central banks and paved the way for the further development of EMEAP after 1996.

         The year 1996 was an epoch-making one for EMEAP. Against the background of the increasing interdependence of member economies, the structure of EMEAP activities was strengthened. The first EMEAP Governors' Meeting, hosted by the Bank of Japan, was held in Tokyo on July 19. During the meeting, two landmark decisions were reached: one, to hold Governors' Meetings once a year; and two, to establish two working groups (the Financial Market Development WG and Central Banking Operations WG) and one study group (the Banking Supervision SG) to undertake studies on the primary functions of central banks.

         The launch of the EMEAP Internet in July 1998 connected all member central banks with an electronic network which allowed the quick exchange of information among members. Alongside the temporary secretariat function that the Bank of Japan has been providing for a number of years, the Virtual Secretariat supported by the EMEAP Internet has enhanced cooperation among members.


Present Organization and Activities

         As described above, EMEAP activities are at three levels: Governors' Meetings; Deputies' Meetings; working groups.

         To date, EMEAP Governors' Meetings have been held on an annual basis since its establishment in 1996. One of the important functions of Governors' Meetings is the exchange of ideas and information regarding recent economic and financial developments in the region. The Governors' Meeting also reinforces the Governors' role as the supreme decision-makers of EMEAP. Basic policies regarding EMEAP activities are decided at the Governors' level and the output of the working groups is reported to and authorized by the Governors. In order to make discussions more focused, themes have been set for each of these meetings. The theme for the first meeting was "means of strengthening central bank cooperation to enhance financial stability and market development in the region", which resulted in the establishment of three working/study groups as mentioned above.

         EMEAP Deputies' Meetings, the core forum of EMEAP since 1991, are held twice a year. Given that Governors' Meetings are held only once a year, Deputies' Meetings play an important role in ensuring the continuity of EMEAP activities and closely follow the quickly changing economic and financial movements in the region. Deputies' Meetings review economic and financial developments in the region focusing on specific issues relevant at the time. The Meetings also monitor the activities of working groups and determine their direction if necessary.

         Since their establishment in 1996, EMEAP working/study groups, each comprised of experts on respective issues, have made significant progress in each area. At the Third Governors' Meeting in Tokyo, taking into account the findings of these groups in the past two years, Governors endorsed their Deputies' proposal to re-organize them into the following three new working groups:

         WG on Payment and Settlement Systems (WG/PSS) studies the development in domestic and cross-border payment and settlement systems. The WG/PSS published a number of documents including "EMEAP Red Book", a comprehensive survey of member countries' payment and settlement systems.

         WG on Financial Markets (WG/FM) studies central bank services and the developments of foreign exchange, money, and bond markets. The WG/FM played a key role in forming the "Asian Bond Fund", in which all member central banks participated.

         WG on Banking Supervision (WG/BS) studies banking supervision issues that are of interest to central banks. It was upgraded to a working group with a more permanent status from the previous study group. Over recent years, the governments of some EMEAP members have moved to separate banking supervision functions from the central bank and place them with a specialist supervisory agency. In this connection, although the Working Group is still mainly comprised of central banks, representatives from the supervisory agencies of some countries have also been incorporated in the Working Group.


         Furthermore, at the seventh Governors' Meeting in Kuala Lumpur, Governors endorsed the Deputie' proposal to establish the IT Directors' Meeting (ITDM). The ITDM, which consists of face-to-face meetings and electronic conferences, studies Information Technology and its application to member central banks.


Where Is EMEAP Heading?

         The financial crisis in Asia affirmed the importance of EMEAP activities, which have nurtured the regional network of information exchange and mutual trust. Despite the recent proliferation of international meetings and institutions, EMEAP has succeeded in maintaining its uniqueness as a meeting for central banks in the region. The ongoing work of EMEAP will seek to draw upon this unique position to further strengthen policy analysis and advice within the region, while continuing to develop and encourage co-operation with respect to operational and institutional central banking issues.

         At the seventh Governors' Meeting in Kuala Lumpur, Governors agreed that EMEAP should further strengthen and upgrade its activities. In this regard, they noted following four broad directions worth exploring: (1) communication and collaboration with other international entities, (2) greater publicity of outputs from EMEAP activities, (3) extending the scope and depth of discussions at the technical level, and (4) enhanced technical cooperation among member central banks.