Chinese Foreign Minister Yang Jiechi on Wednesday urged East Asian nations to increase regional financial cooperation to fend off risks and put in place a US$120 billion liquidity fund by the end of this year.

"We should vigorously intensify cooperation among finance departments, central banks and financial regulatory authorities of the ASEAN Plus Three countries," Yang said at the Association of Southeast Asian Nations, China, Japan and South Korea (ASEAN+3) Foreign Ministers' Meeting.

A key mechanism for the region to ensure financial stability is the so-called Chiang Mai Initiative Multilateralisation (CMIM), which was set up to address short-term liquidity difficulties in the region.

"We should continue to promote the CMIM, and strive to conclude the CMIM Agreement and operationalize the Self-managed Reserve Pooling Arrangement (SRPA) before the end of the year," Yang said.

Finance ministers of the Association of Southeast Asian Nations, China, Japan and South Korea (ASEAN+3) reached in May the agreement on all main components of regional reserve pool, and would implement it before the end of this year.

The total size of the CMIM is US$120 billion with the contribution portion between the ASEAN and the Plus Three countries at 20 percent versus 80 percent.

China and Japan will each contribute US$38.4 billion to the pool, while South Korea will contribute US$19.2 billion.

"We should bring into full play the role of the bilateral currency swap agreements and enhance the capacity of countries in the region to fend off financial risks," Yang said.

(Xinhua News Agency July 22, 2009)