ASEAN, Major East Asian Countries To Establish $80 Billion Bailout Fund

October 24, 2008 8:15 p.m. EST

Beijing, China (AHN) - Major East Asian countries agreed to establish an $80 billion bailout fund by middle of next year to help economies in the region counter the global financial turmoil.

The plan to come up with the fund was initiated by the Association of Southeast Asian Nations and backed up by major East Asian nations, primarily China, Japan and South Korea.

Under the plan, Asian countries could borrow from the fund during a cash flow emergency to strengthen the nation's liquidity. Up to 80 percent of the proposed fund is expected to come from the three most prosperous countries in East Asia.

The East Asian nations' support for the fund took place simultaneously while Asian and European leaders are in China to discuss ways to tackle the financial crisis.

Meanwhile, South Korea guaranteed $100 billion of the country's foreign currency debts and allotted $30 billion to local banks to support its financial industry. The International Monetary Fund hailed South Korea's move, which is expected to boost confidence in Seoul's banking system.