Ten years after Thailand devalued the baht, plunging East Asia into the depths of a devastating economic crisis, the region has recovered its economic confidence. Today, emboldened by Asia's high growth rates and its vast stock of foreign reserves, regional governments are rediscovering their assertiveness and are boldly demanding a bigger say in how the world works. 'Asia now needs to be the one to manage the global financial system,' declared Thai Finance Minister Chalongphob Sussangkarn at an Asian Development Bank seminar held yesterday in Manila to mark the 10th anniversary of Thailand's devaluation. With more than US$3 trillion in foreign reserves among them, Asian central banks already wield huge influence in global financial markets, yet the importance of Asian economies as providers of capital does not reflect on the decision-making structure of global financial institutions. Instead, bodies such as the International Monetary Fund, which are charged with overseeing the world's financial system, are largely controlled by debtor countries, especially the United States, Mr Chalongphob said. 'To prevent another crisis, it is important that Asia takes its responsibility,' the Thai minister said. 'We cannot have debtor nations managing the global financial system. It has to be the creditor nations.' Other Asian officials agree. Speaking at the same seminar, Zeti Akhtar Aziz, governor of Bank Negara Malaysia, the Malaysian central bank, complained that the efforts of Asian countries to reform their domestic financial systems in the aftermath of the 1997 crisis have not been reflected in restructuring of the international financial architecture. 'There has been no breakthrough reform of global financial institutions,' she said, arguing that to respond effectively to future crises, the IMF and its peers need to become much more inclusive. Mr Chalongphob went even further, suggesting that to avert a future crisis, Asian countries should take matters into their own hands. 'We need to set up an Asian Monetary Organisation,' he insisted. Ten years ago, with the IMF roundly condemned for the harshness of its prescribed medicine and its insensitivity to Asia's special circumstances, regional governments suggested setting up their own monetary fund to deploy Asia's vast pool of savings to alleviate the economic pain. Now, with Asian countries flush with reserves, the idea is back. Yet even though the shareholding structures of the IMF and World Bank are badly outdated, it is hard to shake the impression that Asia's latest round of IMF-bashing is motivated largely by grievances nursed since the crisis. In 1997, many Asian policy-makers were convinced that it was the IMF's tough remedies rather than their own policies that caused the Asian crisis. The IMF, they charged, was only concerned with protecting the interests of developed country governments and companies. 'The big city fire department was located too far away,' recalled Chung Duck-koo, who at the time was South Korea's vice-minister of finance, responsible for his government's negotiations with the IMF. 'What we needed was a local volunteer fire brigade.' Today, Asia has the money to set up that body if it wants. Yet talk of establishing a regional institution to mobilise Asia's excess savings for the good of the region's economies, rather than simply investing them in US Treasury bonds, should cause deep misgivings. In recent years, Asian governments have followed a deliberate policy of accumulating reserves and exporting capital in order to hold down the value of their own currencies and promote exports. If they really wanted to use their savings to fund development and stimulate domestic demand as they say, all they would have to do is cease intervening in the foreign exchange markets and allow their currencies to appreciate. That, however, is something no Asian government is willing to do. Partly they fear handing their neighbours a competitive advantage in the world's export markets. But some also recognise that despite all the reforms of the past 10 years, Asia's domestic financial systems are still not sufficiently developed to allocate all that capital efficiently. If an Asian Monetary Fund only made loans with conditions as stringent as those set by the IMF, there would be no point in setting it up in the first place. But if it failed to insist on tough conditions and instead extended soft loans to its members, it would be in grave danger of misallocating capital and wasting money. In short, it would risk becoming nothing more than a slush fund for bailing out governments with misguided economic policies. Rather than devoting time and resources to establishing an Asian Monetary Fund, the best thing Asia's governments can do is to concentrate on developing their own financial markets so that they can efficiently allocate the region's excess savings domestically. That will do far more to avert the next crisis than any display of international assertiveness.