“Our basic hypothesis is that recent events in the US will not cause major changes in US monetary policy“, declared the global rating agency fitch during the early hours of Friday.
Asia-Pacific (APAC) banks are resilient to the risks highlighted by US bank failures.
Direct exposures to Silicon Valley Bank (SVB) and Signature Bank among the portfolio of Fitch-rated banks in APAC appear limited.
We believe deposit volatility risk could be significant for APAC digital banks.
In general, equity portfolio valuation risks are considered manageable for APAC banks, although exposure tends to be higher in India and Japan.
Although we expect the Bank of Japan’s yield cap to rise by 50 basis points by the end of this year, we do not anticipate a sharp rise in JGB yields.
Direct exposures between Fitch-rated banks in APAC to SVB and Signature Bank that we are aware of are not material to credit profiles.
Source: Fx Street
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