Japan, China, South Korea and the 10 ASEAN countries agreed to enhance their regional financial safety net by launching a new lending facility aimed at swiftly responding to crises caused by pandemics and natural disasters.

The finance leaders of the so-called ASEAN Plus Three group agreed at their meeting in Milan, Italy, on Sunday to establish the new facility under their currency swap arrangement known as the Chiang Mai Initiative Multilateralization (CMIM).

The CMIM, created after the 1997-98 Asian financial crisis, is designed to support regional financial stability by allowing members to tap currency swap lines.

The new rapid financing facility will enable members to access emergency financing without conditions in case of financial crises arising from sudden shocks.

“We believe that this new CMIM facility will enhance regional resilience,” the group said in a joint statement.

The CMIM pool currently amounts to $240 billion in foreign exchange reserves, with Japan and China each contributing $76.8 billion, South Korea $38.4 billion and the 10 Association of Southeast Asian Nations members a combined $48 billion.

The CMIM’s two existing facilities - a crisis resolution instrument and a precautionary line - have never been utilised as members have turned to other resources with simpler decision-making processes such as bilateral swap lines.