In recent years, securitization and other ®nancial innovations have provided unprecedented opportunities for banks to reduce substantially their regulatory capital requirements with little or no corresponding reduction in their overall economic risks ± a process termed``regulatory capital arbitrage''. These methods are used routinely to lower the eective risk-based capital requirements against certain portfolios to levels well below the Basel Capital AccordÕs nominal 8% total risk-based capital standard. This paper discusses the principal techniques used to undertake capital arbitrage and the diculties faced by bank supervisors in attempting to deal with these activities under the current capital framework. Ó

Since the Asian financial crisis of 1998, regional scholars and diplomats have maintained that the Association of Southeast Asian Nations (ASEAN) represents an evolving economic and security community. In addition, many contend that what is known as the ASEAN process not only has transformed Southeast Asia's international relations, but has started to build a shared East Asian regional identity. ASEAN's deeper integration into a security, economic, and political community, as well as its extension into the ASEAN Plus Three processes that were begun after the 1997 financial crisis, offers a test case of the dominant assumptions in both ASEAN scholarship and liberal and idealist accounts of international relations theory. Three case studies of ASEAN operating as an economic and security community demonstrate, however, that the norms and practices that ASEAN promotes, rather than creating an integrated community, can only sustain a pattern of limited intergovernmental and bureaucratically rigid interaction.

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The prevailing scholarly orthodoxy regarding recent diplomatic initiatives in the Asia-Pacific assumes that East Asia is evolving into a distinctive regional community. The orthodoxy attributes this development to the growing influence of the diplomatic practices espoused by the Association of Southeast Asian States (ASEAN) and its related institutions. However, a paradox remains, namely: despite the failure of ASEAN’s distinctive practice to fulfil its rhetorical promise in Southeast Asia both immediately prior to and in the aftermath of the Asian financial crisis in 1997, it is nevertheless considered sufficient to validate the projection of ASEAN defined norms onto a wider Pacific canvas. This study analyses how an academic preference for constructivism has misinterpreted the growth in official rhetoric extolling East Asian regionalism since 1997 in a way that has helped produce and reinforce this paradox. By contrast, we contend that government declarations of a developing East Asian identity actually serve to obscure the continuation of traditional interstate relations and do not herald any wider, let alone inexorable, movement towards an integrated regional community.