Asia Pacific

The largest global banks will have to hold more capital and liabilities than previously reported that can automatically be written off in a crisis -- as much as a quarter of risk-weighted assets -- as regulators take on lenders deemed too big to fail. The Financial Stability Board is developing minimum standards that will limit the double-counting of capital banks use to meet existing international rules, according to an FSB working document sent for comment to Group of 20 governments and obtained by Bloomberg News.

The International Monetary Fund Monday backed a gradual exchange of government bonds around the world with new contracts to counter risks that holdout creditors could disrupt potential debt restructurings, The Wall Street Journal reported. The IMF, along with some investors and economists, have warned that U.S. legal rulings that forced Argentina’s hand in a long battle with holdout creditors could imperil other debt operations because they give a small minority outsized power.

As Asian countries roll out Basel III frameworks for their banks, the CEO of Singapore's biggest lender has warned that the more stringent bank capital rules for the region's already well-capitalised lenders may hurt economic growth in the region, Reuters reported. "Asia's banking system is already strong as (banks) generally emerged unscathed from the global financial crisis. If the new rules try to make it super strong, what gives is the capacity of the banks to provide credit," said Piyush Gupta, CEO at DBS.

The junta that seized power in Thailand four months ago has used martial law and a crackdown on its critics to subdue the politically polarized country, the International New York Times reported. But it may have more difficulty handling a fragile economy. Household debt is at a record high in Thailand, exports are flat, the number of tourists is well below last year’s count and experts say low levels at dams across the country are foretelling a severe water shortage. The central bank predicts economic growth of 1.5 percent this year.

Australian central bank officials said possible steps to cool the nation’s housing market wouldn’t necessarily be limited to investor lending curbs.

Singapore’s home prices declined for a fourth consecutive quarter, the longest losing streak in five years, as tighter mortgage measures cooled demand in Asia’s second-most expensive housing market, Bloomberg News reported. An index tracking private residential prices fell 0.6 percent to 208.1 points in the three months ended Sept. 30, following a 1 percent decline in the previous three-month period, according to preliminary data released by the Urban Redevelopment Authority today. The decline matched the losing streak ended June 2009, the data showed.

China stepped up its efforts on Tuesday to transform doomsday scenarios for its domestic property market into merely another round of déjà vu. The central bank reinforced efforts to boost mortgage lending by banks, building on the small but significant turnaround that beyondbrics noted in mid-September. The new policies allow buyers who already own one home but have paid off their mortgage to be considered as first-time buyers, thus qualifying for a mortgage downpayment of 30 per cent of the cost of the loan.

China's Fosun International Ltd has upped its bid for Portugal's Espirito Santo Saude (ESS) to 4.82 euros a share or 460.5 million euros ($584 million) in total, stepping up the battle over the hospital business of the indebted Espirito Santo family, Reuters reported. Portugal's CMVM market regulator said late on Friday it registered the all-cash offer by conglomerate Fosun's Portuguese insurance unit Fidelidade, while also extending by a week to Oct. 10 a rival offer by Mexico's Grupo Angeles, the first to bid for ESS. Angeles initially offered 4.3 euros a share for the company on Aug.

China is likely to delay its financial reform agenda in favour of stabilising growth, economists and investors say, in a move that could hinder efforts to correct distortions in the economy, the Financial Times reported. Deregulation of interest rates was a key plank in the ambitious reform agenda that top Communist party leaders approved last November, which promised to give market forces a “decisive” role in capital allocation.

A Chinese probe into trade financing found nearly $10 billion in fake deals, a senior official said, in the latest warning over practices that raised concern over potential losses among foreign and Chinese banks this year. The Wall Street Journal reported.