This paper examines the ASEAN+3 cooperation of regional financial safety nets, and reviews the regional monetary issues of a single currency and currency competition in East Asia. We point out potential systemic risks in East Asia and the importance of regional surveillance. ASEAN+3 regional surveillance should move forward to the stronger measures of peer review and peer pressure, and make the AMRO a well-resourced professional surveillance secretariat to create capacity to apply independent conditionality. To this effective surveillance mechanism, we propose to establish the Board of Coordination to support the ASEAN+3 ERPD by confirming its decision or remitting the relevant case to the ASEAN+3 ERPD and providing possible legal consultation. The institution building of the CMIM secretariat will accelerate the establishment of a regional monetary institution, e.g. an Asian Monetary Fund. The current crisis provides sufficient incentives for East Asian economies to pursue internationalization of their currencies, and it would open the possibility towards a single currency in East Asia.

I. Introduction
II. East Asia’s Financial Cooperation
1. East Asia’s Regional Financial Safety Nets
2. Asian Bond Market Initiative

III. Regional Surveillance Mechanism in East Asia
1. ASEAN+3 Economic Review and Policy Dialogue
2. AMRO as a New Regional Surveillance Unit 21

IV. Way Forward for Effective ASEAN+3 Surveillance
1. Systemic Risk and Regional Surveillance
2. Looking Beyond the Current ASEAN+3 ERPD

V. The Idea of an Asian Monetary Fund
1. CMIM as a Precursor to Asian Monetary Fund
2. East Asia vs. Euro-Zone

VI. Asian Currency Competition and Movement Toward a Regional Currency

VII. Concluding Remarks

References

Appendix