Zhang Guanghua, vice president of CMB: the future capital gap for Asian banks is greater

The financial crisis has been a general blow to us and European banks, with 2008-2009 years of U.S. banking profits falling 90% and 86% per cent from 2007, compared with $37.9 billion trillion in U.S. banking profits in the first half of the year, but far from pre-crisis levels.　　In 2009, European banks, though profitable, were still down 65% from 2007. The IMF October report showed that the financial crisis caused credit losses of more than 2.2 trillion U.S. dollars, mainly in Europe and the United States. Not only that, because of the continued exposure of bad debts, European and American banks will face the problem of long-term non-performing assets. In the next 24 months, nearly 4 trillion of European and American banks ' debt will expire, and more than $1 trillion trillion of government financing guarantees should expire. And the housing market continues to deteriorate, further dragging down bank assets.　　As many as 140 U.S. banks collapsed in 2009, the highest record since 1992, and more than 100 bankruptcies this year. And the European and American banks in sharp contrast, Asian banking industry, especially China's banking sector, still maintain a good operating performance and operational status. In addition to Japan, Asian banks achieved profits of 146 billion and 160 billion in 2008 and 2009, accounting for 127% and 37% of the total profits of 1000 big banks worldwide respectively.　　Profits grew faster in China's banking sector, at 580 billion in 2008, and 660 billion in 2009, respectively, by 30% and 15% per cent.　　Judging from the stability Index, the IMF report shows that the rate of bank loan losses in Asia is only 1.4%, well below the U.S. 7.3% level, the UK 5.9%, and European banks on average 4.1%.　　We have to see the challenges ahead of the progress of Asian banks. The first challenge is the risk of financial structures.　　At present, Asian banks, financial assets are still too dependent on bank financing, financial structure is still unreasonable phenomenon. The second challenge is the increased strength of international hot money shocks. In the first three quarters of this year, emerging economies ' stock market funds had a net inflow of $47 billion trillion, and bond market funds had a net inflow of $56.7 billion trillion, more than 2007 years of 41.9 billion dollars and 2009 46.2 billion dollars. In this round of capital surges, Asia's emerging economies are the main capital inflow areas.　　In the first three quarters, a total of 11.9 billion U.S. dollars into India, China, the Philippines, Taiwan, Thailand and Vietnam, so that the region's shares, real estate prices rise. The third challenge is that banks ' risky assets are growing too fast and the future capital gap is larger.　　During the seven years from 2003 to 2009, China's credit assets grew 19%, India grew 18%, Indonesia grew 20%, and Vietnam grew 31%, all higher than the 5%-10% levels in the developed world. The fourth challenge is the international level of banking management in Asia needs to be improved. From the implementation of the Basel Agreement, now more than 65% of the financial institutions in the Asia-Pacific region are still in the implementation of the "Basel II" preparatory stage, now has introduced "BA III", so the management of international level is urgentTo improve, especially the level of risk management.