The Dollar Crunch Is Europe’s Gift to Asia
The last crisis shook up banking in the region. So could this one.
A new squeeze on the big banks in Asia.
Photographer: May James/SOPA Images/Light Rocket/Getty Images
Banks in Asia are suddenly shy to part with dollars. And who can blame them? Many of their corporate clients are borrowing the U.S. currency and depositing it with the same banks — just in case they can’t get the funding when they need it.
The caution amid the coronavirus outbreak isn’t all that different from Amazon.com Inc. trying to discourage vendors from cornering toilet paper supplies. “Corporate banks are becoming a bit more discretionary about permitting draws on credit lines where hoarding cash is the sole objective,” according to Greenwich Associates consultant Gaurav Arora.