The ASEAN+3 finance ministers' group has developed its economic review and policy dialogue (ERPD) process as part of regional financial cooperation efforts. Recently the group has decided to integrate the ERPD process with the regional liquidity support facility, called the Chiang Mai Initiative (CMI), and has taken steps to transform CMI into a multilateral arrangement that is more independent of International Monetary Fund (IMF) programs. This requires a significant strengthening of the effectiveness of ERPD. The issue is how to achieve it-whether to adopt an OECD-type 'peer review and peer pressure' approach or an IMF-type 'due diligence' approach. The paper argues that ERPD needs to evolve to embrace both approaches by taking appropriate balances between the two.