The "Best of theWeb" rounds up some of the more noteworthy recent coverage we haveencountered on issues affecting the Asia-Pacific financial sector. Please notethat some links may require a subscription.
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TheBank of Japan'ssurprise decision tohold on to its monetary policy was a "fateful miscalculation," onethat sent the yen soaring and the Japanese benchmark stock market indextumbling more than 8% in one session of trade, according to Goldman Sachs.Forex strategists at Goldman Sachs believe that the central bank should havefurther eased monetary policy, as the market had expected, instead of tellingmarkets to be patient, the BusinessInsider Australia reported. As aresult, the yen recorded its highest one-day percentage gain in more than fiveyears, while the Nikkei 225 dropped more than 8%, a reminder as to how marketscan react if expectations are not met.
Chairman Wang Hongzhang recently suggested that China could loosen the requiredbad loan coverage ratio at banks to help them cope with the ongoing economicslowdown, the South China Morning Postreported. Wang told Bloomberg News in an interview that it would be reasonableand possible for the China Banking Regulatory Commission to lower the coverageratio to around 120% and 130% from the current 150%. Wang's statement showsthat such a move by Chinese regulators is possible given that China's biggestbanks have the power to lobby for policy adjustments. Wu Kan, head of equitytrading at investment firm Shanshan Finance, said it would make sense for banksto lobby for a lower coverage ratio as it would allow them to report betterprofits. China Construction Bank, along with other Chinese banks, have beenstruggling with rising bad debt as economic growth in the Asian country slowsdown.
CraigWright, an Australian tech entrepreneur, is claiming to be the elusive creatorof bitcoin who until recently was known as Satoshi Nakamoto. Wright, in aninterview with BBC, said he played the main role in the creation of thecontroversial digital currencies, adding that others helped him, Reutersreported. BBC said Wright provided technical proof that he has access to blocksof bitcoins believed to be created by the bitcoin creator. Wright made theclaim months after police raided his Sydney home and office after a magazinenamed him as the probable creator of bitcoin and holder of hundreds of millionsof dollars' worth of the cryptocurrency. However, Peter Van Valkenburgh, abitcoin expert and director of research at advocacy group Coin Center, pointedout that Wright should have provided more convincing proof.
India'sICICI Bank Ltd. andAxis Bank Ltd. haveplaced more than 600 billion rupees of loans under their watch list of stressedassets as the two banks brace for more bad debt in the coming quarters. ICICIBank said around 440 billion rupees of loans are below investment grade, whileAxis Bank has put around 226 billion rupees of loans on its watch list, The Hindu Business Line reported. Aportion of the loans came from the iron and steel and power sectors, which bothbanks identified as stressed sectors. Meanwhile, Axis Bank said it expectsaround 60% of its watch list accounts to turn sour in the next eight quarters,increasing asset quality pressures for fiscal 2017 and fiscal 2018. Both bankshave shored up their contingency pools in anticipation of the rise in bad debts.
and theExport-Import Bank ofKorea are set to receive capital injections from the government aspart of an ongoing overhaul of the shipping and shipbuilding industry, Reutersreported. South Korean Vice Finance Minister Choi Sang-mok said the additionalcapital buffers at the two banks are preemptive measures given that the twolenders are part of the overhaul in the said industries. Choi added that noconsensus has been made as to whether the Bank of Korea will engage in quantitativeeasing to provide capital for the two banks.