Repeat Of 1997 Asian Crisis Unlikely: S

Mumbai, Sep 5 (UNI) A financial crisis similar to the one that hit Asia in 1997 is unlikely to recur, as banking systems in the region are now in a better position to weather possible stresses, according to the ''Asia 1997 Retrospective'' series of three reports published today by Standard&Poor's.

'' Unlike the situation in 1997, Asian companies now have lower foreign currency debt exposure or hedging policies against foreign exchange risk, and sovereigns have bolstered their external positions with stronger reserves,'' S&P's credit analyst Terry Chan said. '' Nevertheless, the overall increase in the debt of sovereigns and, to a lesser extent, corporates remains a concern.'' The report examines nine system risk factors in 2005, including banking system structures, government debt, and international reserves, and offers a comparison with the situation in 1996.

The study covers 10 Asian financial systems-- China, HongKong, Indonesia, India, Korea, Malaysia, the Philippines, Singapore, Taiwan, and Thailand.

Asia's banking systems have strengthened since 1997, although some have yet to regain their full pre-crisis credit strength, the study says.

'' There is more governance, improved asset quality, and some consolidation in Asia's banking systems, and these are now better equipped to withstand potential crises,'' said Standard&Poor's credit analyst Adrian Chee.

| '' Nevertheless, our stress testing indicates that systems with low interest rates, significant net exports to GDP, and high exposure to an avian flu outbreak, are the most vulnerable to sharp rises in non-performing assets in times of crises,'' said Mr Chee.

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