Moody’s cautiously optimistic on crash anniversary

05 July 2007 09:09  [Source: ICIS news]

MUMBAI (ICIS news)--Ten years after the Asian economic meltdown, Moody’s Investor Service said on Thursday it does not expect the 1997 regional crisis to recur as the area’s economies have recovered their growth and stability.

The ratings agency’s view stemmed from encouraging macroeconomic factors such as record foreign exchange reserves, current account surpluses and moderate inflation, though it warned that rectifying the problems that precipitated the crisis had generated another set of potential threats like asset bubbles.

Improved regulation, better corporate governance and more flexible foreign exchange regimes meant Asian economies now occupied a stronger position, the ratings agency said.

Moody's ratings on individual banking systems in Asia were either “stable” or “stable to positive”, it added.

Although Asia's banks now occupied a stronger position, individual countries should take the opportunity to continue with reform as the current economic cycle could well peak in the next few years, it said.

 

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Author: Isha Jha
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