Fitch says Asia bank exposure to U.S. bank crisis limited

Fitch Ratings said on Thursday that banks in Asia and the Pacific are resilient to risks seen in the failure of U.S. institutions, with the agency noting that regional banks it covers had little exposure to Silicon Valley Bank and Signature Bank.

Fitch wrote in a note that the direct exposures it was aware of among APAC Fitch-rated banks to SVB and Signature were not significant to credit profiles.

“Weaknesses that contributed to the failure of the two banks are among the factors already considered in our rating assessments for APAC banks, but these are often offset by structural factors,” Fitch said

Fitch’s analysis of APAC financial institutions follows U.S. Treasury Secretary Yellen’s overnight statement that not all uninsured deposits will be safeguarded in future bank collapses.

After suffering heavy losses throughout the week, financial and banking stocks in the Asia-Pacific region recovered early on Friday.

Fitch also stated that banks in the region would not suffer much of an impact even if the Federal Reserve made unexpected changes to its monetary policy, such as cutting its benchmark interest rate instead of an expected rate hike.