VINACHEM

East Asian nations announced Thursday they have doubled the money in a regional currency swap pact to $240 billion in an effort to shield themselves from the European debt crisis.

"We strongly believe that our agreement made today on strengthening the (pact), including doubling its total size... will serve as another important step forward to strengthen the regional financial safety net," they said.

South Korean Finance Minister Bahk Jaewan warned the crisis fund could well be put to use for the first time should the eurozone crisis trigger a capital flight from Asia.

"I would say that the eurozone crisis served as a catalyst that led to this agreement,' he told a news conference in Manila after a meeting of finance ministers of the 13 countries.

The pact allows China, Japan, South Korea and members of the Association of Southeast Asian Nations to swap their local currencies for US dollars in times of crisis.

It was named the Chiang Mai Initiative after being formed in the northern Thai city following the 1997 Asian meltdown that hit South Korea and many of the ASEAN members.

Japan and China, which have the world's largest foreign exchange reserves, are the main contributors to the pool.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

"It had never been used, but that does not mean that we can exclude the possibility of the (currency pool) ever being used," Bahk said.

As eurozone banks shrink while scrambling to meet capital adequacy ratios, trouble could wash over to Asia, which has kept growing despite economic weakness in the US and Europe, he warned.

"Given the fact that there are risks of deleveraging, I believe there may also be some capital outflow from the ASEAN + 3 region," Bahk said.

The European Banking Authority said last month that Europe's major banks would have needed 242 billion euros ($317 billion) in extra capital in June 2011 to meet new rules meant to shield financial institutions from new shocks.

The communique released in Manila announcing the move also said the 13 countries agreed to increase the amount of money available for lending to troubled members without conditions set by the International Monetary Fund.

The IMF-delinked portion, now at 20 percent of the total, will rise to 30 percent next year with a view to raising it to 40 percent in 2014 if conditions warrant, Bahk said.

Meanwhile, China, Japan and South Korea finance ministers said after meeting separately in Manila on Thursday that they had agreed to buy more of each other's government bonds, but gave no detailed amounts.