SE Asian officials fear for regional banks

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PATTAYA, (Thailand), April 9 (AFP): Senior Southeast Asian finance ministry officials fear that the problem of bad debt held by banks in Western nations could soon spread to their region, a Thai official said yesterday.
The officials from across the Association of Southeast Asian Nations (ASEAN) were speaking ahead of a meeting of their respective finance ministers in the Thai beach resort of Pattaya on the sidelines of a major regional summit.
The export-dependent region has suffered badly as its major markets in the United States have collapsed due to the global financial crisis, but its banks have so far escaped relatively unscathed.
"There are concerns the problem of bad loans may affect the banks in this region," Thailand foreign ministry permanent secretary Suparat Kawatkul told reporters after the ASEAN finance ministry officials met.
He said reports from the Asian Development Bank and International Monetary Fund had shown that the banking crisis could spread.
He said each country would seek better capitalisation of its banks and change financial regulations to stave off a banking crisis, adding that the matter would be further discussed at a meeting in Bali, Indonesia, next month.
Southeast Asian foreign ministers are due to discuss the setting up of a 120- billion-dollar foreign exchange pool as an emergency credit line Thursday.
The fund would be created with assistance from China, Japan and South Korea.
The leaders of China, Japan, South Korea, Australia and New Zealand are to join the 10-member ASEAN bloc in Pattaya Friday for three days of meetings focused on the region's economy.
Despite Thai anti-government protesters attacking Prime Minister Abhisit Vejjajiva's motorcade in Pattaya Tuesday, foreign ministry spokesman Tharit Charungvat said the foreign leaders would still attend.