Samurai versus formosa: a tale of two bank funding markets
The search for liquidity has driven many bank treasurers to explore greater diversification in their funding programmes.
Gina Orlins, head of long-term funding at Credit Suisse, tells Euromoney that funding from non-US currencies at the bank has grown from between $1 billion to $2 billion pre-crisis to around $6 billion today.
In the first half of 2015 many banks have turned to the samurai market in Japan and the formosa market in Taiwan in search for funding diversification. But the difference in approach has been quite striking.
Credit Suisse is one of a number of European banks to have tapped both markets this year, the others being Standard Chartered, Société Générale, Lloyds and Rabobank.
However, bank issuance in the formosa market has swamped that in the much larger samurai market: $11.9 billion-equivalent to $7.4 billion-equivalent, according to Dealogic. Some 17 banks issued in the former and nine in the latter – not one of the samurai issuers was from the US.
Indeed, the relative activity of the large US banks in the two markets could hardly be more different. Five of the six largest issuers in the formosa market have been US banks, who between them have tapped the market for $5.8 billion this year – roughly half of all issuance. However, they have issued nothing at all in the samurai market.