Asian banks cushioned from sub-prime blows

Asian financial systems are less securitised than their Western counterparts, and exposure to sub-prime collateralised debt obligations is limited. This leaves Asian banks free to extend credit and the sector faces little pressure to raise capital. Asia also benefits from a number of shock absorbers - namely high savings rates, high foreign exchange reserves and large current account surpluses. In addition, consumer and corporate debts are low, which means Asia is much more in control of its own destiny in the event of an external shock. The US remains an important market for Asian export...