Asia acts to bolster markets on cue from Europe, U.S.
By Tomasz Janowski
SINGAPORE (Reuters) - Asian policymakers rushed on Monday to do their part in averting a global financial meltdown, boosting guarantees for depositors, promising to pump more cash into the battered credit markets and talking up their economies.
The region's authorities have long insisted that limited exposure of their financial institutions to the toxic U.S. housing debt and sound economic fundamentals made Asia well placed to weather the worst financial crisis since the 1930s.
But last week's global equity markets sell-off that wiped out about a fifth of their value and spurred U.S. and European authorities to rush out bank bailout plans, set off alarm bells in the region, particularly in countries that suffered the most during the financial crisis a decade ago.
Indonesia raised the government guarantee on bank deposits and made it easier for the central bank to pump funds into the tight money market, following a similar move by Australian and New Zealand authorities over the weekend.
India pledged more for the money market after slashing cash reserve requirements while South Korea repeated assurances its reserve stockpile was sufficient to ride out the global storm and confirmed plans to give banks better access to private capital.
Authorities in Singapore, Hong Kong and Bahrain also sought to calm investors with assurances that their banking systems were sound and that they stood ready to intervene if necessary.
"There has been unprecedented policy action around the world, including in India, and this has provided a short-term stability to the markets," said Amitabh Chakraborty, president of equities at Religare Securities.
Japan, where a failed medium-sized insurer became the country's first casualty of the global credit turmoil last week, said on Monday it would consider guaranteeing all bank deposits, if such a move proved necessary. Continued...
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