Standard and Poor's sees signs of strain in 16 financial systems
HONG KONG, Sept 15 (AFP) - Global credit rating agency Standard
and Poor's warned Tuesday of weaknesses in the financial systems of
16 economies, with up to 70 percent of China's assets at risk.
The New York-based credit assessor included seven Asian
economies -- China, Hong Kong, Japan, Malaysia, the Philippines,
Singapore and Taiwan -- among the 16 which revealed signs of
deteriorating credit quality.
The others were Chile, the Czech Republic, Egypt, Greece,
Israel, Lebanon, Panama, the Slovak Republic and the United States.
In a report received here, Standard and Poor's said excessive
credit growth, weakening external funding profiles and deflating, or
soon to be deflating, asset prices were a concern in all 16
economies.
"Some of these system's fundementals are so poor that half of
their assets may become problematic: for others the decline will be
relatively mild," it said in a special report.
Standard and Poor's said China's gross problematic assets (GPA)
could potentially range between 35 to 70 percent of its total
assets.
It defined the potential level of GPA as a percentage of
domestic credit to the private sector and non-financial
enterprises.
The agency cited a slowdown in economic growth, falling property
prices and declining corporate health as factors which could lead to
an explosion of problem loans in China.
It also said Chinese banks lacked the credit skills to deal with
the problem and warned that the cost to the government was likely to
be high.
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