Commentary

The Asian banking community is anxiously following the debate around the BCBS/IOSCO proposed mandatory margining of non-cleared swaps that began with the publication of Margin Requirements for Non-Centrally Cleared Derivatives in July 2012 and has been followed up by a near final “Second Consultative Paper on Margin Requirements for Non-Centrally Cleared Derivatives”, published in February 2013.

There is a common misconception that there is a huge difference in pace and culture between Asian and foreign multinational banks. However, with the tables turned post global financial crisis, some Asian banks have aggressively expanded, invested in product suites and platforms, and hired some strong foreign talent – leading to a strong competitive edge over foreign banks. With Asia being the key driver of economic growth across the world, now may be a good time to consider opportunities in an Asian bank.

Loan default is a universal phenomenon associated with all types of business enterprises. However, loan default in case of banks has special significance because extending of credit is almost the exclusive business of banking institutions.

New bank services and advanced technology enables treasurers to implement multi-currency, multi-country and multi-bank cash pooling in Asia. This article discusses why treasurers should invest in cash pooling to save money. 

For a long period of time, Yuan’s exchange rate has been on the agenda in the large trade deficit regions, such as the U.S.A. and Europe (see Table 1). The U.S.A. has been arguing for long time that China has kept currency valuations at artificially low levels, favoring Chinese manufacturing exports harming this way the manufacturing industry in the U.S.A.

Singapore has long been considered the epicentre of wealth management and financial services for Asia, and to a greater extent the globe. However an up and coming South East Asian country is quickly catching up to the diminutively sized island nation to become a financial powerhouse in the region…

A few months ago during a course that I did for a group of South Korean bankers, there was a moment where the conversation turned round to what kind of special perks and benefits were given to the South Korean bank customer who had more money than the average retail customer.

In the wake of ongoing impact of global financial and economic meltdown, particularly more acutely on advanced economies, sparing for the time being it’s full brunt on Asian economies; It is a compulsion for Asian bankers to be aware of threats and opportunities that are enveloped in The New Great Game, which is being played by the big powers in the heart of Asia.

On 8 February, the People's Bank of China announced that the Industrial and Commercial Bank of China (Singapore) will become the RMB clearing bank in Singapore.

During Chinese New Year, I visited a friend working for the Exim Bank of Taiwan (EBT), the only export credit agency(ECA) in Taiwan set up in 1979, I was advised with joy that business turnover of the Bank has passed TWD90billion (aroundUSD3 billion) in 2012 and will be easily over TWD100billion (around USD3.33 billion)this year. He is so happy because the growth rate is almost ten folds compared to ten years ago . However, knowing that total turnover of Sinosure, EBT's counterpart in China set up in 200, was up 35% from previous year to USD293.6billion in 2012 and the percentage of export coverage for China is more than 10% while EBT's % of coverage is less than 1% during the same period, he has to admit that EBT has plenty room to improve. From study, I found out that the difference between the two institutions is the marketing strategy. EBT is selling policy without financing but Sinosure is selling through banks which are providing trade finance. Similar practice was experienced by Coface in China through its strategic partner, Pin-An Insurance, to support banks' clients to obtain trade finance. Other private credit insurance companies such as Euler-Hermes, Atradius, and Chartis...etc. are also growing and compete seriously with each other since financial crisis in 2008. The product is formally available only for large enterprises but many banks are using it to support supplying chain finance, factoring, and invoice discount..etc. for SMEs clients recently.

With an increasing degree of uncertainty prevailing in the global economy, it becomes imperative that corporates make efficient use of their available cash positions. While the need to be cash rich cannot be under stated, the need to be liquid is the need of the hour. A well-structured Liquidity Management policy can help treasurers achieve the best possible outcome with the available cash resources.

The mentality for investing is extremely different to the mentality for trading. When traditional investors shift to trading, this can become an issue:

With half of online Australians already engaged with video online and a third using video calling, how can financial services institutions use video to better engage customers and workers?

The LIBOR scandal rocked the world of finance last year after reports emerged of gross misconduct by Barclay’s Bank in the submission of LIBOR rates to the British Banker’s Association (BBA). Barclays had been under investigation by authorities for its role in setting the world’s key short term interest rate-the London Interbank Offered Rate (LIBOR) and had to pay total fines of £ 290 million in separate settlement agreements with the Financial Services Authority (FSA), U.S. Department of Justice and Commodity Futures Trading Commission (CTFC).

The growing trend of central banks around the world to stimulate economic growth by instituting quantitative easing is having the effect – either intended or unintended - of rapidly depreciating major currencies such as the Japanese Yen, Chinese Yuan, US Dollar and Euro.

Financial institutions received much of the blame for the global financial crisis in 2008. A wave of regulatory reforms in the financial and banking sector have taken place globally since that time in an attempt to address perceived weaknesses in the system.