The advantage enjoyed by East Asian banks is that they have learnt their lessons from the Asian financial crisis of 1997 and have substantial foreign currency reserves, low indebtedness. Thailand for example declared that its government will recapitalize Thai banks if effects from the US financial crisis spill over to the Kingdom.
The Thai move came after an explicit warning from the Asian Development Bank (ADB) president Harahiko Kuroda who cautioned the Thai finance officials not to be complacent about the spread of the crisis beyond Europe at the annual meeting of the World Bank and the International Monetary Fund in Washington on the second week of Oct 2008.
Kuroda also proceeded to warn Asian banks that they could face trouble even if they had proved to be stronger than the ones in the US and Europe.
Reacting to this warning, the Thai government planned to accelerate budget disbursement to rural areas such as to the SML Fund for villagers to boost grassroots and local economies and stimulate consumption in the process. This is designed to compensate and make up for the expected dip in private investments and export earnings in 2009.
The government has also asked for US$500 million to US$1 billion worth of loans fro the World Bank and ADB for a mass rapid transit and other logistics projects earmarked for 2009.
AFP, "Thai bank declares extra holiday amid financial crisis" dated 12 December 2008 in the AFP website [downloaded on 13 December 2008], available athttp://www.google.com/hostednews/afp/article/ALeqM5gYWSHZw1o2HRrR_TXICGe...
Chaitrong, Wichit, “’We will act if it spills over’” dated 17 Oct 2008 in The Nation (Thailand: The Nation), 2008, p. 11A.
Lee, Kuan Yew, “China can make a big difference” dated 4 December 2008 in the Straits Times (Singapore: Singapore Press Holdings), 2008, p. A22.