The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

How to survive the crisis

For some financial institutions and companies, the Asian crisis is an opportunity. For others it's a simple matter of survival. Investment banks have been among the quickest to slash costs and focus on core businesses. But while some commercial banks are recapitalizing and making provisions for bad loans, others are preparing to expand. Pauline Loong reports.

The Chinese word for crisis, points out Mervyn Davies, chairman of the Hong Kong Association of Banks, is written with two characters: one depicts risk and the other opportunity. "Companies can't go to the stock market for funds now and can't raise debt capital," he says. "Thus there is the opportunity for banks to provide equity finance." In this new environment, institutions that know their markets well will be at an advantage.

The days of suitcase bankers, who flew in and out of the region with little market knowledge, are gone. To make money now, banks must have good local intelligence. They need to be aware that the crisis hit different countries in different ways. In Hong Kong, for example, Davies says the one message that has come out of the crisis is that the territory is well regulated and well controlled and has a strong banking system.

Responses among banks and corporations to the Asian financial crisis have differed greatly. A rare few have already seized the opportunities for new business. But the immediate response of most has been to cut costs, restructure operations and scale back unprofitable areas. Some strategies for handling the crisis are almost universal.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree