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The rise of regional banking in Asia and the Pacific

Author

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  • Eli M Remolona
  • Ilhyock Shim

Abstract

Before the Great Financial Crisis of 2007-09, much cross-border banking activity in Asia-Pacific was driven by dollar lending from European banks. Ilhyock Shim and Eli Remolona (BIS) find that, post-crisis, this global intermediation has lost much of its European leg. Banks from within the Asia-Pacific region now dominate cross-border activity. At the same time, Asia-Pacific banks have taken a rising share of short-term foreign currency lending. Financial authorities in the region are looking to arrangements such as the ASEAN Banking Integration Framework to help them balance the efficiency gains of regional integration against the need to monitor and control the risks of financial instability.

Suggested Citation

  • Eli M Remolona & Ilhyock Shim, 2015. "The rise of regional banking in Asia and the Pacific," BIS Quarterly Review, Bank for International Settlements, September.
    • Handle: RePEc:bis:bisqtr:1509j
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    References listed on IDEAS

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    1. Bruno, Valentina & Shim, Ilhyock & Shin, Hyun Song, 2017. "Comparative assessment of macroprudential policies," Journal of Financial Stability, Elsevier, vol. 28(C), pages 183-202.
    2. Pornpinun Chantapacdepong & Ilhyock Shim, 2014. "Correlations across Asia-Pacific bond markets and the impact of capital flow measures," BIS Working Papers 472, Bank for International Settlements.
    3. Jimmy Shek & Ilhyock Shim & Hyun Song Shin, 2018. "Investor Redemptions and Fund Manager Sales of Emerging Market Bonds: How Are They Related? [Borrow cheap, buy high? The determinants of leverage and pricing in buyouts]," Review of Finance, European Finance Association, vol. 22(1), pages 207-241.
    4. Hyun Song Shin, 2017. "Breaking free of the triple coincidence in international finance," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Statistical implications of the new financial landscape, volume 43, Bank for International Settlements.
    5. Patrick McGuire & Goetz von Peter, 2012. "The Dollar Shortage in Global Banking and the International Policy Response," International Finance, Wiley Blackwell, vol. 15(2), pages 155-178, June.
    6. Chantapacdepong, Pornpinun & Shim, Ilhyock, 2015. "Correlations across Asia-Pacific bond markets and the impact of capital flow management measures," Pacific-Basin Finance Journal, Elsevier, vol. 34(C), pages 71-101.
    7. Torsten Ehlers & Philip D Wooldridge, 2015. "Channels and determinants of foreign bank lending," BIS Papers chapters, in: Bank for International Settlements (ed.), Cross-border Financial Linkages: Challenges for Monetary Policy and Financial Stability, volume 82, pages 29-68, Bank for International Settlements.
    8. Alicia Garcia-Herrero & Philip Wooldridge, 2007. "Global and regional financial integration: progress in emerging markets," BIS Quarterly Review, Bank for International Settlements, September.
    9. Patrick McGuire & Goetz von Peter, 2009. "The US dollar shortage in global banking," BIS Quarterly Review, Bank for International Settlements, March.
    10. Elliott, Douglas J., 2014. "Lessons for Asia from Europe’s History with Banking Integration," ADBI Working Papers 462, Asian Development Bank Institute.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mitsuru Yaguchi & Ayako Yamaguchi & Koji Sakuma, 2018. "Integration of Financial Markets in Japan and Asia —Financial Deepening in Asia due to Japanese Banks’ Entry—," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 14(5), pages 835-870, September.
    2. Miriam Goetz, 2024. "Multinational Lending Retrenchment after the Global Financial Crisis: The Impact of Policy Interventions," Journal of Financial Services Research, Springer;Western Finance Association, vol. 66(1), pages 51-75, August.
    3. Lai, Van Son & Ye, Xiaoxia & Zhao, Lu, 2019. "Are market views on banking industry useful for forecasting economic growth?," Pacific-Basin Finance Journal, Elsevier, vol. 57(C).
    4. Hyun Song Shin, 2017. "Breaking free of the triple coincidence in international finance," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Statistical implications of the new financial landscape, volume 43, Bank for International Settlements.
    5. Aduba, Joseph Jr. & Harimaya, Kozo, 2023. "Impact of international expansion strategy on the performance of Japanese banks," Japan and the World Economy, Elsevier, vol. 65(C).
    6. Ulrich Volz, 2016. "Regional Financial Integration in East Asia against the Backdrop of Recent European Experiences," International Economic Journal, Taylor & Francis Journals, vol. 30(2), pages 272-293, June.
    7. Stefan Avdjiev & Bat-el Berger & Hyun Song Shin, 2021. "Gauging Procyclicality and Financial Vulnerability in Asia through the BIS Banking and Financial Statistics," World Scientific Book Chapters, in: Steven J Davis & Edward S Robinson & Bernard Yeung (ed.), THE ASIAN MONETARY POLICY FORUM Insights for Central Banking, chapter 6, pages 224-262, World Scientific Publishing Co. Pte. Ltd..
    8. Hans Genberg, 2017. "Financial Integration in Asia," Working Papers wp22, South East Asian Central Banks (SEACEN) Research and Training Centre.
    9. Bank for International Settlements, 2018. "Structural changes in banking after the crisis," CGFS Papers, Bank for International Settlements, number 60, december.
    10. Guglielmo Maria Caporale & Luis A. Gil-Alana & Kefei You, 2019. "Stock market linkages between the ASEAN countries, China and the US: a fractional cointegration approach," CESifo Working Paper Series 7537, CESifo.
    11. Sasidaran Gopalan & Bhavya Gupta & Ramkishen S. Rajan, 2023. "Financial globalisation in ASEAN+3: Navigating the financial trilemma," Global Policy, London School of Economics and Political Science, vol. 14(3), pages 464-476, June.
    12. Amanda Liu & Ilhyock Shim & Vladyslav Sushko, 2020. "Cross-border commercial real estate investment in Asia-Pacific," BIS Quarterly Review, Bank for International Settlements, September.
    13. Yildirim, Canan & Kasman, Adnan & Hamid, Fazelina Sahul, 2021. "Impact of foreign ownership on market power: Do regional banks behave differently in ASEAN countries?," Economic Modelling, Elsevier, vol. 105(C).
    14. Lopez, Claude & Adams-Kane, Jonathon & Wilhelmus, Jakob, 2016. "Cross-Border Investment in Europe: From Macro to Financial Data," MPRA Paper 76622, University Library of Munich, Germany.
    15. Catherine Koch & Eli M Remolona, 2018. "Common lenders in emerging Asia: their changing roles in three crises," BIS Quarterly Review, Bank for International Settlements, March.

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    More about this item

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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