Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Businessweek Archives

Cleaning Up Asia's Bank Mess (Int'l Edition)

International -- Editorials


The dominoes are beginning to fall in Asia, but not those envisioned during the cold war. The command-and-control economies that once gave Asia such high rates of growth are failing--choking on corruption, regulation, and bureaucratic inflexibility. The banking crisis sweeping the region, from China, Korea, and Japan in the North to Thailand and Indonesia in the South, highlights the need to move to a more market-oriented, transparent capitalism if fast growth is to resume.

For decades, a small group of politicians, bureaucrats, and executives have guided development. Banks have been under the influence of state officials who steered investments to specific industries and companies. Thanks to Asia's high savings rate, the flow of funds has been substantial. But not all the money has been well spent. Much of it has gone to local real estate and construction companies, which were then obliged to offer big contributions to political patrons or their families. Other loans went to plants that proved unprofitable. National pride overrode market realities in many cases.

It is now time to separate Asia's banking and political systems and to end mercantile policies that masked huge credit problems. Banks must have improved disclosure, better accountability to shareholders, and more independence from meddling bureaucrats. Risk analysis and cost controls are desperately needed. Instead of managing politicians, bankers must learn to manage financial risks. It is the best way to restart the Asian growth machine.

blog comments powered by Disqus