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'Asia may emerge from crisis faster than others'
By siliconindia
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Friday, 10 April 2009, 18:59 IST |
3 Comments
New Delhi: As most of the Asian banks hold fewer toxic assets than lenders elsewhere, the region's economies may emerge from the global crisis faster than others, said Zhao Xiaoyu, Vice President of the Asian Development Bank. Besides, the improved cooperation in the region since the 1997 Asian financial crisis will help Asia emerge out of this crisis earlier than others, Zhao said in an interview in Tokyo yesterday, as reported by Bloomberg.
Financial institutions worldwide have incurred $1.3 trillion in losses and write-downs in the wake of the worst financial meltdown since the Great Depression. A report in the London-based Times newspaper expects the International Monetary Fund to say in new forecasts the losses and write-downs on bad debts held by banks and insurers could swell to $4 trillion. Most of those are from U.S. institutions, according to the report.
European and American financial institutions are reportedly selling valuable Asian assets to get hold of cash and improve their balance sheets. However, Zhao thinks that strategy is wrong in the long run. The ADB predicts that economies in Asia excluding Japan will grow 3.4 percent in 2009 and 6 percent in 2010.
Accoring to Zhao, improving trade finance is one of the keys to an early recovery in the region. The financial crisis has prompted banks around the world to reduce lending to emerging markets and cut credit lines to importers and exporters.