FACTBOX: Asian nations to launch $120 bln emergency fund

(Reuters) - Thirteen east Asian countries, including three of Asia's top four economies, agreed on Sunday to launch a $120 billion liquidity fund, the first such facility in the region to be governed internally.

The Chiang Mai Initiative is an expansion of an existing network of mostly bilateral currency swap arrangements between the 10-members Association of South East Asian Nations (ASEAN) and Japan, China and South Korea.

Following are details of the fund agreed between finance ministers from the 13 countries at a meeting held on Indonesia's resort island of Bali on the sidelines of the Asian Development Bank's (ADB) annual meeting:

- The scheme marks the first and strongest such financial alliance to be launched and governed by Asia for Asia.

- Japan and China each to commit 32 percent of the total fund and South Korea 16 percent, with the 10 ASEAN members sharing the remaining 20 percent.

- The fund will come into being by the end of 2009.

- Japan and China agreed to contribute the same amount after taking into account the fact that Japan's economy is larger than China but Beijing had bigger foreign exchange reserves, one participant at the meeting said.

- Decision-making on lending issues to be made with a simple majority in terms of the voting power, while changes on fundamental issues such as membership and terms of lending to require a consensus among the full members.

- An independent surveillance unit to be set up with the help of the ADB and the ASEAN secretariat as soon as possible to support decision-making.

- The joint statement did not specify in what currency any lending was to be made, but South Korean Finance Minister Yoon Jeung-hyun told a news conference that the general understanding was to use the U.S. dollar as the base currency.

- The scheme is an upgraded of the Chiang Mai Initiative (CMI) launched after an agreement in the Thai town of Chiang Mai in 2000 between finance ministers of the 13 countries to help avoid a repeat of the 1997-1998 Asian financial crisis.

- The existing CMI amounts to $78 billion but is actually a network of bilateral currency swap arrangements between member countries rather than a single, centrally controlled scheme.

(Reuters team in NUSA DUA, Indonesia; Editing by Hans Peters)