1. Group name: LI NA (HE20)
Group members:
KHONG SIAU SAN BG09110137
ANG PEI CHII BG09110321
WANG XIN BG09170437
YIN YE BG09170471
PAN YING BG09170472
QIN YIWEN BG09170446
1
2. Current Global Financial Crisis & Its
Implication on International Financial
Institutions:
The Case of Asian Region
2
3. 1. To understanding the knowledge of current global financial
crisis
2. To know how current global financial crisis implicated on
international financial institutions in Asian Region
3. To identify the impact of current global financial crisis on
international financial institutions in Asian Region
4. To analysis the Asian Region’s responses for the current global
financial crisis
3
4. Subprime mortgage loan, higher interest rate.
Banks lowered the level of qualification.
Loan more but income remains the same.
Banks sell mortgage-backed securities to financial
institutions.
Households unable to repay loan, house value decrease.
Crisis happened.
4
5. Currency and maturity mismatched in private balance
sheets
Credit and asset bubbles and excessive investment in
property and other sectors
Unsustainable currency appreciations and external
deficits
Lack of self-insurance against a sudden reversal of
capital flows, and excessive reliance on outside help
and policy advice
5
6. East Asian
China, Japan, North & South Korea, Hong Kong
South Asian
India, Pakistan
West Asian
Israel, Saudi Arabia, Turkey
Southeast Asia
Indonesia, Malaysia, Philippines, Thailand, Singapore
6
7. East Asian
Japan
• Major financial institutions’ net profit fall by 40%
China
• Mostly unscathed in the short run
• Marginal/ no impact because of the “decoupling”
effects and efficient market reforms
Korea
• Suffering from massive financial deleveraging by
foreign investors
• Highly joined by household debt
7
8. Hong Kong
• Heavily impacted on banks’ income statements
• Pre-tax profits deteriorated
South Asian
Pakistan
• Rupee value depreciated
• Experience significant deterioration
India
• Almost negligible
8
9. West Asian
Saudi Arabia
• Shortage of dollar liquidity
Turkey & Israel
• No effected
Southeast Asia
Malaysia
• Portfolio investment outflows
Indonesia
• Balance of payments in deficit
Philippine & Thailand
• No effected
9
10. Joined the world community – G20
Adopted specific macro-prudential or capital control
measures
ASEAN Finance Ministers maintaining sound fiscal
and monetary policies
ASEAN+3 Finance Ministers established the Credit
Guarantee and Investment Facility (CGIF)
10