This paper uses a macroprudential perspective to assess the resilience of banking systems in Association of Southeast Asian Nations. In particular, Jose Ramon Albert and Thiam Hee Ng use a vector autoregression model to conduct a stress test on the Philippine banking system. The estimated impact of macroeconomic shocks on nonperforming loan and capital adequacy ratios of the banking system is found to be generally minimal. However, the banking system do have some vulnerability to interest rate and stock market shocks. Read more.

Economic growth in emerging East Asia will continue to moderate to 7.2% in 2012 from 7.5% in 2011—as growing sovereign debt problems in Europe and an anemic US economy raise the spectre of a deep global economic downturn, says the Asian Development Bank’s latest Asia Economic Monitor.  In the event that both the eurozone and the US economies contract sharply, the impact on emerging East Asia would be serious yet manageable, the report says. Download report and press release. Watch video and listen to the podcast.