Asia Banks Dodge the Wall Street Crisis

Businessweek ^

[KingJaja]

It was a scene eerily reminiscent of the dark days of Asia's financial crisis in 1997. Long lines of panicked savers waited outside branches of Hong Kong's Bank of East Asia on Sept. 24 after rumors had started circulating the day before by cell-phone message that the bank was in peril because of its exposure to Wall Street's meltdown. Shares fell 6.9%. The run only lasted 24 hours, ending after the bank issued denials and threatened to take legal action against those spreading the rumors. BEA also won support from Hong Kong tycoons such as Li Ka-shing, who snapped up bank shares, and assurances by the Hong Kong Monetary Authority that the bank's balance sheet was strong.

Ironically, the general public's jitteriness about the health of local banks comes at a time when many of them are actually in pretty good shape. With the notable exception of HSBC (London-based but Hong Kong-listed), which is on the front line of the U.S. financial crisis because of its mortgage portfolio there, Asian banks look strong thanks to minimal exposure to the woes of Fannie Mae (FNM), Freddie Mac (FRE), and Lehman Brothers. Indeed, a number of analysts have buy recommendations for banks in Hong Kong, Singapore, and Korea.

[Perdogg]

so it’s not that urgent eh?

[RegulatorCountry]

Last I heard, China’s stock market was down by two thirds on the year. What sort of exposure do Asian banks have to this little-reported crisis? Now is not the time for hubris, and this article is just that.