Asian Banks' Growing Influence over Global Financial Rules, System Seen

Manila Bulletin, June 10, 2013 | Go to article overview

Asian Banks' Growing Influence over Global Financial Rules, System Seen


Asian banks are seen to exert more influence by having a bigger voice in the global banking system in terms of banking regulations aimed at stabilizing the global financial system on back of their steadily expanding global presence over the past decade.

"This has been consistent with Asia's and ASEAN's (10 countries of the Association of Southeast Asian Nations) leading role in the global economy, as well as the major source of growth in the world economy, amid the relatively softer growth/recovery in the US economy and lingering recession and debt crisis in the Euro zone," said Lorenzo Tan, president and CEO of Rizal Commercial Banking Corp. Lorenzo also serves as chairman of the Asian Bankers Association (ABA), a regional group of more than 100 banks in Asia, and president of the Bankers Association of the Philippines.

During the past several decades, Tan said banks in the region especially Japanese and Chinese have been establishing a firm global presence. Since the biggest economies of the world are in Asia with China as the second largest followed by Japan in third slot, the region's financial institutions have had to grow with the economy and markets. India is the 11th largest economy in the world while South Korea is 16th and Indonesia is 17th biggest.

Similarly, as Tan pointed out, the biggest banks in the world are in the region including the Industrial and Commercial Bank of China which is the world's fourth largest banking institution followed by Mitsubishi UFJ Financial Group of Japan. More Chinese and Japanese banks made the list of the global largest such as China Construction Bank, Mizuho Financial Group, Bank of China, Agricultural Bank of China and Sumitomo Mitsui Financial Group.

According to Tan, who runs the country's seventh biggest bank in terms of assets, the region's banks have a bigger voice in crafting banking regulations.

The Philippines, for example, in a bid to make its financial system stronger is one of the early adapters of Basel 3 principles, about four years ahead of schedule.

"Asia and ASEAN banks have greater role and responsibility in ensuring the stability of their respective financial and banking systems, especially in promoting an environment conducive to sustainable global economic growth, in view of their increased contribution to the fortunes of the global banking/finance," said Tan.

During a meeting of the ABA members in Manila, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. affirmed that Asian and ASEAN banks have a growing influence in global banking but there is more to be done to strengthen the "Asian voice".

Tetangco stressed that Asia, which has remained resilient amidst the problems of the US and Europe, has much work to accomplish ahead to maintain a position of strength. …

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