Asia Program

From the Pacific Exchange Blog

Capital Flows Go into Reverse in Asia’s Financial Hubs

Posted October 08, 2015

While much of the world has seen a retrenchment in international lending following the financial crisis, Asian banks have dramatically increased their international exposure. Even more striking is that in Asia’s financial centers, Singapore and Hong Kong, the increase in international activity has been accompanied by a change in direction of capital flows. Both economies have now become large net lenders to emerging Asia, a change that reflects larger underlying trends in the region.

Developing Local Currency Bond Markets
 Can Help Insulate Asia from Volatility

Posted October 02, 2015

Many Asian borrowers increased their dollar-denominated debt in recent years amid the extraordinarily low rate environment. Recent volatility has been characterized by capital outflows from Asian economies where such debt accumulated. While emerging Asia remains vulnerable to further capital flight with a majority of external debt in foreign currency, its bond issuances are largely in local currency. Further deepening of bond markets combined with increased local currency debt can insulate emerging Asia from further volatility.

The Speed and Trajectory of Household Debt in South Korea

Posted September 11, 2015

Similar to many countries in Asia, Korea’s household debt increased considerably after the global financial crisis. As of year-end 2014, household debt as a percentage of GDP was 76% and increased 15 percentage points since 2008. Concerns have risen as the growth rate of household debt has exceeded that of income and the broader economy for a prolonged period.

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