Global credit crisis singes not burns Asian banks; study

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New Delhi, May 9 (UNI) The global credit crisis triggered by sub prime crisis caused by bursting of housing bubble in the United States has singed but not burnt Asian financial institutions because of their much smaller exposure to US mortgage-backed assets, according to a rating agency.

The subprime mortgage crisis, which began with the bursting of the US housing bubble, is an ongoing economic problem manifesting itself through liquidity issues in the banking system owing to foreclosures which accelerated in the United States in late 2006 and triggered a global financial crisis during 2007 and 2008.

Of the estimated 300 billion dollars total write-downs and credit losses worldwide, write-downs by Asian institutions are less than six per cent, that is below 18 billion dollars, Crisil said in an analysis.

Of the Asian losses, the highest write-down reported so far has been by Mizuho Financial Group at 5.4 billion dollar, Crisil senior director Raman Uberoi said. The Group is a banking holding company based in Tokyo.

Besides lesser exposure, Asian financial institutions were also protected by their asset mix, which primarily consists of Asian credit and related assets, the analysis added.

Mr Uberoi said major US and European financial institutions, on the other hand, reported much more losses; with five worst-affected having contributed more than 40 per cent of total losses of 300 billion dollars.


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