Japan on Friday suggested that Asian economies should establish an institution to pool foreign-exchange reserves as part of efforts to achieve stability in currency markets in the region.
According to a report presented Friday to an Asia-Europe finance ministers' gathering by Finance Minister Masajuro Shiokawa, a currency basket system should be adopted by Asia's emerging-market economies "collectively, at the regional level" to prevent a currency crisis like the one in 1997 and 1998.
The crisis stemmed from several nation's stubborn defense of artificial pegs, including the Thai baht's link to a currency basket.
Since the nations involved severed their pegs, currencies in the region have mostly stabilized and the likelihood of a second crisis has been largely defused.