BIS says Europeans ignored warnings to become largest lenders to SE Asia

International banks ignored warning signs from South-east Asia in the first half of 1997 and continued to lend fresh money to South Korea, figures compiled by the Bank for International Settlements (BIS) show.

Lending by global commercial banks to South Korea, by far the largest debtor of any emerging country, rose by $4.9bn to a total outstanding amount of $103.4bn by mid-1997, the BIS said.

Short-term loans still dominated lending to South Korea with 67.9 per cent of the total amount, or $70.2bn, due to be repaid by mid-1998 or earlier, the BIS said in its semi-annual report on the maturity and nationality of international bank lending.

"In spite of growing strains in South-east Asia, overall bank lending to Asian developing countries showed no evidence of abating in the first half of 1997," said the Swiss-based BIS, banker for the world's central banks.

European banks were the most aggressive lenders to South Korea and Asia in general, with their share of claims on South Korea rising to 35.1 per cent from 30.5 per cent in mid-1996.

South Korea's outstanding debt to all European banks rose to $36.3bn in mid-1997 from $33.8bn at end-1996, according to BIS figures.

Japan's beleaguered banks, still the largest individual group of creditors to South Korea, cut their exposure to $22.9bn from $24.3bn in the same period. Their share of Seoul's debt declined to 22.9 per cent from 24.3 per cent.

German banks had the largest exposure of European banks to South Korea by mid-1997, with outstanding loans of $10.8bn, up from $10.0bn at the end of 1996.

German banks' share of South Korea's outstanding bank loans was 10.4 per cent.

New credits to emerging countries in Asia rose by $32.0bn in the first half of 1997 to $389.4bn with accelerated lending to India, Malaysia and Taiwan.

European banks, which overtook Japanese banks as the main lenders to Asia during the second half of 1995, increased their share of lending to Asia to 43.3 per cent by mid-1997 from 40.4 per cent mid-1996.

Japanese banks, which have been retreating internationally, accounted for 31.8 per cent of lending to Asia in mid-1997, down from 34.2 per cent mid-1996.

European banks had also been expanding in Asia and Latin America at the expense of their traditional markets in Eastern Europe and Africa, the BIS said.

The European advance in Asia has been led by German and French banks, who had a share of 12.1 per cent and 10.4 per cent respectively of an outstanding $389.4bn.

Unlike British banks, whose lending was spread throughout Asia, lending by German and French banks was concentrated, according to the BIS.

"Thus, more than half of the increase in the Asian exposure of German banks was accounted for by Malaysia and China, while in the case of French banks a similar proportion was directed to South Korea."

- Reuters

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
peopleMathematician John Nash inspired the film Beautiful Mind
News
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
music
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine