The Asian Dollar Market
“6,
November 21, 1975 .
THE ASIAN DOLLAR MARKET by
Robert F. Emery
NOTE: International Finance Discussion Papers are preliminary materials circulated to stimulate discussion and critical comment. References in publications to International Finance Discussion Papers (other than an acknowledgement by a writer that he has had access to unpublished material) should be cleared with the author or authors.
‘he Asian Dollar Market
Pape
4%
I. The Establishment and Promotion of the Asian Dollar Market (ADM)-- 1
. A. Local Factors that F.vored Singapore as a Site for the ADii---- 2 B, Regional Factors Favoring the Development of an LDile-eco--7r7 4 C, Why the Promoters Felt an ADM Would be Viable-----------7""°" 5 D. Measures Taken by the Government of Singapore to Promote the
ADM a 2 oon nn nnn nn 6 II. Asian Dollar Banks, ACU Accounts and Interest Ratesen--eeeeooo=== 8 A. Origin and Growth of the Asian Dollar Banks----- 7c errr rrr 8 B, Types of Deposits and Condi tions----+------2-ee ene eree nnn 10 a oP Asian Dollar Interest Rateso--- nr rte 35 III, Sources of Funds and the Rate of Growth of the Markete---- cecceee 18 A, Sources Of Fundsonn nn nnn nn eee 18 B, The Rate of Growth of the Market------- ooo errr rrr 20 ‘Iv. Uses of Funds and Related Mattersecce eter” - 23 A. Borrowers, Terms and the Interbank Harket--e--s-eeeeeeeo=se=- 23
B, Syndicated Loans and Bond Issues------------ ooo nnn 28 - C, The Shift way from Net Lender to Europe--ercrr rrr rr rrr rrr 32
V. Some Concluding Observations <<a een rrr 33° Appendix A, Measures Taken by Singapore to Promote the ADM----+---7°7 37
Appendix B, Singapore Banking Institutions------rer rrr rrr rrr rrr 42
qu ASIAL DOLLAR NATIET
Robert F. Emezy*
I, The Establishment_and Promotion of the Asian Dollar Hari:et . Since Cctober 1968, the foreign and indigenous bant:s in
Singapore have developeé a market in Euro-dollars. Although referred to as the Asian dollar mavicet, it is really an Asian-based mariet in Euro-dollars, there being no basic difference -- other than tne geographical aspect -- between Euro-dollars and Asian Gollars, WUevertheless, because the term tAsian dollar marizet™ (ADii) is now widely used and is also helpful in denoting tue geographical context of tne market, it will be emnicyed throughout this paper rather than such terms as “Asian currency market," or “Asian-based Zuro-dollars."
Euro-dollars axe dollar-denominated denosit liabilities of bans outside the United States, ‘Tue phrase is somewhat unfortunate in that the banl:s maintaining deposits of this type are not confined geogranhically to the Zuropean continent, but also operate elsewnere, ‘such as in Lebanon, Canada and the Bahamas -- to mentiun only three ; non-European countries, ‘Thus, the term Euro-dollars should be understood as including a wider frame of reference than tlestern Europe, even thougn this arca accounts for the bull. of tne Euro-dollar oneraticns.
There is also a mart:et in Euro-ilar.:s, Euro-Francs and otuer “European currencies which is similar to the one for muro-dollars.
This broader mart.et encompassing both Euro-dollars and European
* Tie views expressed acrein are solely those of tne author and do not necessarily represent tue views of tne Federal Reserve Systen.
ae
-2 currencies, is generally referrec to as the Euroecurrency marizet, and a similar mari:et exists in Singapore, since the Singapore market is not confined to dol.ar-canominated denosits. Mowever, the phrase "Asian dollars" will nevertheless be used in this paper to refer to Singapore-based, Euro-currencics,
Before discussing the specific characteristics of the Asian
dollar marl:et, it is useful to indicate the various factors waich played
a role in the establishment of the marl-et in Singapore. These are discussed in the four sections which follow. © They are explained in considerable detail since many nersons do not understand why Singapore is particularly suited to be e financial center and also to indicate what specific practical measures 4 ccuntry can tate to develop as an
international financial center.
A. Local. Factors tnat Favored Singapore as @ Site for the ADI In mid-1968 there were present in Singapore a configuration of factors that made the city-state one of the best candidates in the
Asian area for tue establishment of an Asian dollar matizet.
"Jell-developed financial system, -- One of the mere inportant
factors was that in mid-1968 Singapore possessed a well-developed bani:ing
and financial system capable of providing a wide variety of financial services, At the time tncere were 35 commercial bant:s including 25 foreign branch bani:s. Although the domestic money and capital mar’.ets were modest and relatively underdeveloped, Singapore by this time had
clearly developed the canacity to undertale a wide range of commercial
and financia' activities. 7 ‘ . “
ee ee ee en. ee ne nee ee mene eemaee menemmer: man mer Ss
-3-
' Absence of innibiting controls. =~ Another favorable factor, stemming from the Government's predilection for the maintainance of free martiets, was the near absence of inhibiting controls on domestic and international transactions, Thais meant that funds were basically free to move in and out of tne country with a minimum of exchange control. Beginning about August 1968 and in the following years, measures were taken to liberalize or eliminate certain regulations that might inhibit the growth of the martet, These actions are detailed in Appendix A.
Stable government and social system. -~ Although still relatively
young as an independent countr Ju Singapore -- by mid-1968 -- had
demonstrated that it pessessed both a stable government and a stabie
o
social system, It had acnieved an impressive record of rapid economic
‘growth and good economic management, aided by its declared policy of
promoting foreign investment and a free ané open economy.
7
Favorable peorrapiic location and time overlap. -~ Singapore is also blessed with a favorable geographit location in Asia, being near the center of non-Communist Asia in the wide arc extending from Pal:istan, dowm through Soutneast Asia, and u3 to Japan. Thus, Singanore is relatively close t» such Asian financial centers as Manila, ‘long Kong,
Yuala Lumour, and Bangl:o!:. In addition, Singapore -- unlilce ilong Kong,
and ‘fotyo -- has an important time overlap in its business nours with
European financial centers. When the Lendon mari:et opens at 9:00 a.m.,
ee oe if Singapore becane an inderendent country on August 9, 1965.
lene ci ee eet ee
eke
‘it is 4:30 Dem in Singanore, and tuis allows the dealers in Singapore to contact their countezparts in London, Zurich and other European financial centers. They are thus able to obtain firm Euro-dollar rates and-consummate transactions without having to wait for an overnight execution of an order, With exchange rates somewhat more volati:e in recent years as a result of the widespread system of floating rates, the same-day consummation of transactions constitutes an additional advantage in doing business in Singapore,
Excellent communication facilities. -- Singapore also has the
-advantage of having an excellent communications networl: via telex and
telenhone wits the world's major financial centers. These facilities have been strengthened by the completion of a satellite earth station on Sentosa Island (located a half mile south of Singapore ) for an even better system of global communications. | B. Regional Factors Favorine the Develonment of an ADI
In addition to the favorable factors cited above which the Singapore economy possessed in mid- 1968, there were also several regional factors present in the 1960's that were conducive to the development in the region of an Asian dollar market. Cne of these was the ranid rate of economic growth that had been achieved by a number of ccuntries in the region, With new and dynamic industries being established, this created attractive lending opportunities for the benks that eventually
began to operate in the Asian dollar maricet.
1] Singapore became an independent country on August 9, 1965.
2 St emer fs ener om ca we Re niente oe
. : eens Caen Geek ante ee 2 Oa RRO AROCLOR, CES eR eE Danna Te eenanmnmnemanemnemmemnetats
ee ee ere wrens ern oe
eto. bat e 5 - : : re oe
* In addition, the de facto dissolution of the sterling Area
in the late 1960's tended to reduce the ready availability of funds
for those Asian countries with sterling area ties, Thus, there was a
need for additional sources of finance -- a need which could be met, in
part, by Asian dollar credits, | Another favorable factor was that financial institutions
located in the region would have an advantage over non-regional institutions
in developing local. deposit sources and identifying appropriate borrowers,
In addition, the local financial institutions would usually be in a more
favorable position for assessing the economic and political trends in
the area than the institutions outside the region. . 6, Why the Promoters Felt an ADil Would be Viable
| In addition to the factors cited above, there were other factors influencing the promoters of the ADIi in the late 1960's which
led them to believe that such a market would-be viable, Cne of these
-was the belief that there were fairly large sums of convertible currencies
in the hands of Asians and non-Asians domiciled in Asia that couid be tanned as a source of funds for the market. It was. also thought that since there were many small firms in need of funds that could not obtain them very readily from sources outside the region, these firms would provide attractive lending opportunities for the banks operating in the Asian dollar mar‘.et. |
Lastly, the promoters felt that in view of the Euro-currency bants' tendency to favor fairly !|arge transactions, Asian lenders with
y.
fae ae cee ae eee ee te eee
A ne ste yan wit ma ° POE TERR FE ELT te a RERUN , Ps NT een Hoe ene .
eee 6 ee nr
fe en en ee ee eee =
o
Pa Cone tee ee me ng er meee
em epee er rete
~6-
. small sums could find attractive investment opportunities in the Asian
dollar market, Under present arrangements, Asian dollar deposits in
amounts as small as $5, 000 are currently accented by banks operating in
the marl:et, in contrast to the considerably higher minimums recuired by
most Euro-currency bani:s in Europe. -
D. Heasures Talen by the Government of Singapore to Promote the ADU
i : Despite a}.1 of tnese favorable factors, it is probably no
i -- exaggeration to say that Singapore's Asian dollar martet would not nave
been viable unless tne Singapore Governnent2/ nad deliberately taken
certain measures to promote the market. An absoiutely essential step was
the elimination of the withholding tax on interest paid on Asian doilar
denosits, Since funds placed with the Euro-currency marizets outside
' Asia have not been subject to withholding taxes since the inception of
the meri:et, this step was essential in order to mate Asian dollar deposits
fully comoetitive with those nlaced in the Euco-currency marl.et.
Hany other measures, of course, have also been talen by the
Government of Singapore to promote and develop the mariet. liost of these
are detailed in Annendix A in chronological order. Although no attempt
has been made to indicate the relative impoxtance of each measurej there
{fs little doubt that ali of these actions talcen togethes helped considerably
‘to promote the growth of the market.
a , . : if Including the Nonetary Autnority of Singapore, 4 central banl:-tyve
institution, whica vas established at the beginning of 1971.
ee et ‘ nce mee One er mere nmerree? nen: ene eS Re EE nee we OE, AER sar er a 98s Nenana eee ee p= etter in ee
Le a ae cee eee cme eee ee eneens A eee mee ee eee eee creme eo
dzation for the Asian dollar banks to make foreign-currency loans to
‘denominated deposits with the Asian dollar banks up to a certain maximum
into Singapore -- including the Asian dollar market, but on an increasingly
-more restrictive basis, This has been accomplished through increasingly
-7T7-
Some of the more important measures, besides the elimination of the withholding tax on interest paid on Asian dollar deposits, included: (1) an authorization by the Government for the Asian dollar banks to issue certificates of deposit denominated in U.S. dollars; (2) removal of the minimum liquidity ratio requirement against foreign
currency deposit liabilities that the banks had to observe; (3) author-
locally incorporated firms against export orders or letters of credit;
and (4) authorization for Singapore residents to hold foreign-currency
amount.
Since the late 1960's, new foreign banks have been allowed entry
restrictive bank licensing procedures, so that at present there exist
four types of banking licenses, These are: (1) a complete banking License; (2) a restricted License; (3) a license for offshore operations; and (4) a license to carry out a merchant banking operation. Complete banking licenses are held by those foreign banks that had established branches in Singapore by February 196, In general, no new licenses were granted to foreign banks during 1965-69. During 1970-72 and early 1973, restricted licenses were granted to forcign banks, and, beginning in Harch 1973, licenses were granted to foreign banks to engage in offshore operations. (See Appendix: A, "March 1973" entry, for details on the
*y.
particular restrictions. ) Roughly: two-thirds of the banks that have
en ee RE I SN A ORNS MER mE 8 SERRE RIERA A ER RORY? NCR I mR ~ ~ _ nme ee
-8-
been granted merchant banking licenses have also obtained permission to accept foreien-currency denominated deposits.
“. It is readily evident from the rather lengthy list of government actions detailed in Appendix A that the Singapore authorities have taken fairly frequent, and often substantial, measures to promote the development of the Asian dollar martet, As will be indicated in the following section, the number of foreign and local bani:s participating
in the market has grown significantly since the market's inception.
u1. Asian Dollar Bani:s, ACU Accounts and Interest Rates
A. Origin and Growth of the Asian Dollar Banks The bani: which first initiated the moves in the spring of 1968
that led to the establishment of the Asian dollar market was the Singapore
branch of the Bank of America, Convinced that favorable opportunities
existed for the establishment of such a market -- in line with the
encouraging factors discussed in the previous section -- the Bank of America proposed to the Singapae Government that it be allowed to establish a new and separate department, This deoartment would be licensed to accept non-resident foreign currency deposits, to pool the funds thus obtained, and to lend these funds to non-resident corporate and individual borrowers.
The Singapore Covernment welcomed the nroposal,. and after
taking the necessary administrative actions, licensed the Bani: of America
12 erm te ese rc = 7 TE LE TE RL RRS 8 Ne’ Ae RR TEE Mt and =
eee a ee nee tore are ee ere oe ee ——— — te rere erenen ee ee =
-9-
to establish an Asian Currency Unit (acu)/ within the bank to carry
. out the proposed operations, The Government stipulated that all ACU
transactions should be recorded in the bank's special ACU accounts and that they should be kept separate from the banl:'s other transactions, In addition, the head office of any ACU bank is required to provide the Monetary Authority of Singapore with a commitment that it will make up for any shortfall in liquidity suffered by the ACU bank, After receiving government approval, the Bank of America began its ACU operations in
October 1968, 2/ quietly and without fanfare, Later, in April 1969, the
_ First National City Bank of New York announced that it was also interested
$n establishing an Asian Currency Unit. By October 1969, the Singapore Government had licensed the Singapore branch of the Chartered Bank to establish an ACU operation and this was followed shortly thereafter by
the licensing of three more banks, viz., the Singapore branches of the
‘First National City Bani, the Hongkong and Shanghai Banking Corporation,
"and the Bank of Tol:yo,
During the 1970's the number of authorized ACU banks increased substantially, Some idea of the year-to-year rate of growth in the ACU
banks is provided by the following data which indicate the number of
1/ An "Asian Currency Unit" (or ACU) is the formal name used by the
Singapore authorities for the convertible forcign currency deposit accounts maintained by the Asian dollar banks. Banks maintaining these accounts will be referred to as ACU banks.
2/ S.Y. Lee, "The Asian Dollar Market in‘'Singapore, " The Malayan
_Economic Review, Singapore, April 1971, p. 46,
Se re eo a ere es rng gener ae ee ae SP ne ST SOPRANO Sen sa anne
we tm ee
- o£ local bant:s, foreign branch ban!:s with complete licenses, foreign
| ~ 10 « authorized ACU banks at the end of the year: u (1969); 16 (1970); 21 (1971); 24 (1972); 46 (1973), and 56 (1974), By July 1975 there were
a total of 61 authorized ACU banks, ‘hese consisted of 6 local banks,
13 foreign branch ban!:s witi complete licenses, 12 foreign banks with
restricted licenses, 17 offshore banks and 13 merchant pants .2/ A complete list of Singapore's banking institutions as of December 31, 1974, is provided in Appendix B with a breal:down of ACU
banl:s and non-ACU banks, In addition, a further breakdown is provided
banks with restricted licenses, offshore banl:s and merchant banks.
With more than 80 banking institutions now operating in Singapore, there would appear to be little doubt that the number of r new ban!: licenses issued by the authorities will tend to decelerate © . in the years aheac. it is doubtful that the authorities will inaugurate
a fourth, even more restictive, type of license, than the 'complete",
“yestricted, ' and "offshore" licenses which have been issued so far,
B. Types of Denosits and Conditions
Cn Getober 1, 1968, the marl-et in Asian dollars was initiated in Singapore when the first ACU ban!: began to accept foreign currency deposits.2/ In order te encourage the development of the marl:et, the first ACU banl:s to onerate in the marl:et waived the collection of any 1/ Singapore's merchant bant:s onerate in a manner similar to those in London, offering such snecialized sexvices as coroorate finance, underwriting and portfolio management.
2/ Bant:ing Structures and Sources of Finance in the Far East, Research Unit of the Banter, London, 174, p. 96.
Sen a RRR IR eR a EO RR TT Ne ee a am nee aa RI cae
-l1-
commision, handling or service charges 2/ Initially, deposits were accepted only from entities other than Singapore residents, and the
‘ACU -banl:s were not required to report such deposit transactions to the authorities, Although Singapore's Banl.ing Act of 1970 permits bant:s -at their option -- to accept secret numbered accounts similar to those maintained by Swiss bans, this provision of the Act has never been implemented, apparently because of estate tax oroblems, In Switzerland,
the estate tax problems can be overcome by the power-of-attorney device, but the Singapore laws (wich were inherited from the British) require the disclosure by the banks of the deceased depositor's identity to the tax authorities.</ | .
-The ACU bani:s are authorized to accent 14 specified foreign
currencies as deposits and to trade in these currencies.3/ These are
listed below,
1; Austrian Schilling 8, Japanese Yen
2; Belgian Franc 9; Wetherland's Guilder’
3, Canadian Dollar 10; Worvegian Krener
43° Danish Mroner ll; Portuguese Escudo 53 Deutsche lark (12; Swedish Kroner
6; French Pranc 13; Swiss Franc
7. italian lire 14, United States Dollar
The Asian Dollar ilartet, First Mational City Bank, Singapore, liay
1971, p. 3. . .
2/ Asia 1973 Yearboo!:, Far Eastern Economic Review, Mong Kong, 1972, p. 67. In addition, the ACU bant:s are authcrized to accept Scheduled
Territory currencies, including the Britisu pound sterling, from
External Accounts. For additional details, see ‘tventy-Si::th Annua’,
Report on Exchange Restrictions, International iUonetary Fund, Washington,
G.C., 1975, vn. 414-6,
aap ne ne Re EE Ae SRL a GERI on em ms OF RE eR WS ete ern nee
iy
Roughly 90 per cent of the foreign currency deposits reportedly consist. of U.S. dollars, / with the remainder being mainly in Swiss and French francs, the Deutsche mark, yen and guilders, This U. S. dollar proportion is higher than in the Duro-currency market in Europe where the share has been fluctuating around 75 per cent in recent years. Among the banks operating in the Asian dollar market, the American banks tend to dominate because of their natural U,S. dollar base, |
As indicated earlier, there are restr ictions on . the types of deposits that certain banks in Singapore can accept, These restrictions depend on the tyne of license that a bank has received from the authorities.
Tnose ban!:s with a complete license are allowed to carry out. a full range of bani:ing activities, including the accentance of all types of devosits as defined in the Bant:ing Act of 1970 excent for one restriction, This: is that the setting un of any new branch offices requires specific approval from the lionetary Authority of Singapore.
Yoreilgn banks having a restricted bant:ing license are permitted
to accept fixed deposits (time deposits) only in amounts exceeding
—§. $250, 000 per depositor, and they are not allowed to operate savings
accounts. Though they are permitted to conduct current account operations (4. es, to accent demand deposits), this pri ivilege is not to be regarded as &n authorization to accept denosits of amounts under S. $250, 000,
VU “Asian Doilar iiarket, " International Currency Review, London, liay-June 1973, p, 21.
-13-
Excent for these restrictions, the banks may onerate normal banl:ing facilities. Most of the banks with restricted license are wholesalerather than retail-oriented, They operate in the Asian dollar marl:et for the:funding of their loan portfolios in Singapore dollars,
| Those banks with an offshore banting license are prohibited from operating both current and fixed-term Singapore dollar accounts. They fund themselves from the Singapore interbank money market and are allowed to extend only medium-term loans of over S, $1 million per borrower, These bantts are expected to concentrate on external business for the benefit of the region and the Asian dollar market in Singapore, and to avoid domestic business in order to forestall excessive comnetition in the very adequately-banl:ed domestic sector of the Singapore economy.
As indicated earlier, about two-thirds of the bants with merchant banl:ing licenses have been authorized to establish ACU accounts and to operate in the Asian dollar- mart:et,
Turning next to tne specific types of denosits offered by tie ACU banks, these range from call deposits to five-year time deposits,
The minimum amount for deposits, and tho intervals at which interest is calculated, vary from banl: to bank and from party to party, To provide some idea of the types of deposit maturities, however, the types and
maturities offered by one of the ACU bant:s!/ are listed below,
1/ Singapore International Merchant Banl:ers Limited,
merry Te a me re a ee ene ee ERROR Seca ie as mm eee NET ett ar meee eo . . os ,
APL BI Gt res 0 aoe TPR “Pat. ot Pyar t eta aretha s IESE OE Ts, yO myer EE BE MT BE Te II I IIE a _ae
omenttiphtartne
Call Denosits
ee a ee
2 Day's ilotice -- repayable on two days' notice from either party after a minimum of four days duration fiom deposit, 7 Day's lotice -- repayabla on seven days! notice from cither party . aftex a minimum of seven days duration from deposit, Fixed Deposits -- 7 days, 14 days; . 1, 2, 3, 4,5, 6,9 and'12 months; 2,3,4 and 5 years, _ ips
Rates can also be auoted for intermediate periods, adjusted to suit the depositor's requirements, Interest is paid monthly and on maturity.
The two- to seven-day notice deposits are designed for bant':s
and large commercial firms that have excess funds for a very short time,
0 et nee - ee
the minimum deposit usually being $100,000, For smaller non-bank firms and individuais, the minimum neriod is for seven days, For time deposits iy of one month or more, some banl:s will accept a minimum deposit of $5, 000, : The most common maturities tend to range from one to three months, Tne averase denosit maturities in Singapore are reportedly ‘shorter than in the European Euro-currency nartet In August 1970, one of the ACU bani:s introduced negotiable certificates of deposit (Ics) for investors in the Asian dollar martet and promoted the development of an interbank marl:et in ops .2/ Tne Monetary Authority of Singapore also furthered the expansion of the HCD marl:et by abolisiing (in March 1972) the stamp duty on certificates
of deposit and encouraging the establishment of three discount houses
pas aERnaieee RT SRE Te mene
V/ “The Singapore Asian Dollar Var!: et," World Financial ifarkets, iiorgan
: Guaranty Trust Co,, ilew Yort, larch 1973, De Il,
‘ 2/ se Asian Dollar liarlet, First ilutional City Bank, Singapore, 1971,
Pe Jo ; .
Qy / oO
- 15 -
in November 1972, with the latter being authorized to deal in NCDs.
The I!!1Cis in Singanore are issued in bearer form and have the
‘advantage, of course, that they can be sold by the bearer at any time
before the maturity date, The seller of the NCD does run the risk of a possible capital loss, however, 1£ interest rates have increased since the time of: purchase, Tue minimum denomination for the ilCDs is reportedly $5,000, The demand for the certificates has been relatively limited, and no active secondary marl:et in them has yet developed, mainly because the ACU bants have not imnosed penalties on customers making early withdravals of standard time deposits. Ce Asian Dollar interest Tates
The interest ratss paid on ACU deposits are not subject to any legal ceilings, but fluctuate freely. In practice, the rates paid in Singapore are determined by the rates naid on Zurodollars in London and Europe, with these rates reflecting the free interplay of mariet forces, The onening quotations in the Singapore market are tne previous day's closing rates for Eurodollars in London and Europe.2/ During the day there are only minor fluctuations in the rates until late in the afternoon when trading between Singapore and London/Zurope commences. Then any difference in the rates between the two marlets quickly disappears and the rates caualize at whetever level the Lurodollar marl:et dictates. Turing the second hai of 157, however, some ACU banks began to quote deposit rates indenendently and‘to tal:e positions based on their own assessment of mari:ct conditions, ‘tle presence of nine international money
brokers in Singapore has contributed to tiis change. ‘See Far Eastern
Economic Review, long “Yong, Septesber 26, 1975, p. 38. a
wee wee ee
~~ 5a renal ’ . r oe ewe baw FAA PEGE LETT BFE MUN HO Oe OR ONRIO ROTOR ome Rem ERY AMEE Gey Leth = tn Pee OM tM TS Do ee haa a a
Qo -36-
Most quotetions on deposit rates consist of the bid and offer interbani: rate, Althougn the rates in the Asian dollar market closely parallel those in Eurone and London, the rates paid on deposits by the ACU banks are not necessarily uniform, Deposit rates are reportedly
_ealculated on a 360-days-a-year basis.2/ The table below indicates the
rate structure that erevailed on October 13, 1975. _
Table 1. Deposit Rates: Singanore Asian bollar Interbanl: Harlet
. Offer _ Bid Overnight a 5-3/4 5-5/8 Two to three days 5-3/4 5-5/8 Three to four dayse/ 17 16-7/8 Seven days, fixed 5-7/8 5-3/4 One month 6-1/4 6-1/8 “ } Two months - 6-1/2 . 6-3/8 Three months . 7-5/16 7-3/16 Four montis 7-1/2 7-3/8 Five months 7-3/h 7-5/8 Six montis . 7-7/8: 7-3/4 Hine months 8483/4 . 8-1/4 Twelve months ; 8-5/8 8-1/2
lost depositors tend to place their funds for periods of one month or ‘more because of the higner rates received on those deposits. As might be expected, the rates on six- to twelve-monta deposits are less volatile and fluctuate: in a narrower range than the rates for snorter-
term deposits,
| vA The Asian Dollar Market, First National City Bank, May 1971, p. 5. 2/ The significant+y higher rates quoted reflects the fact that in
| this case the borrowing ACU bank can utilize the funds for three to four days, plus the pertod over the veel.end, before settlement,
:
nang ey neeereem a rere eenencmpeeani ac:
aa ee, ,
ces wee ee eee een momen + em
| Toe trend in the three-month bid rate for ACU dollar deposits
since January 1969 is presented in Chart 1 along with the three-month
rate for Euro-dollars in London, It is evident from the chart that the
rate’ for Asian dollar deposits parallels quite c’osely that for Euro-
\ { | | dollars in London, As indicated ecarliex, the Singapore rate is basically determined by the nrevalling rate in London, | Several other points merit comment, Cne is that the rates can, and do, change substantially from month to montn. In 1973, for example, a ‘the rate jumped from 8-7/8 per cent at the end of June to 11-1/4 per | 14 cent at the end of July. Another point is that’ the rate trends roughly my approximate the various stages of the economic cycle in the United States.- Gy) Taus the 1970 recession in the United States is mirrored by a decline in the rate, while the economic upswing in 1973 finds its counterpart ina . rise in the rate during the first three quarters of that year. | Turning next to the interest rates on Asian dollar loans, a distinction can be drawn between the interbenk rates and those for nonbani: borrowers, Tne rate of interest on interbant: loans is known as the SIBO rate, or Singapore Interbanl: Offer rate.. Corporate borrowers pay a premium over the STBO rate commensurate with the lending bank's assessment of the credit risi. involved, vor first-class corporate
borrowers, the premium nay be as low as 0.75 percentage points, while
for higher-risl: borrowers, it may be as high as 3.0 percentage points.
ee we
According to one source, a fairly common premium is one that is 1.5 to
a ae ene a EEE ORRIN NO OM UE cece te ME RE OE NRRL Sm A A mR eo ane lie remnant Sema camer
vom ee to Se o er
. t SPONSE RTT Ot ne en soem meneame martinea trans 0t PRUETT MRR ARAN that Mame opr APE AST SUNSET GER Rag MOG we A SO TARAS tenn ATC A Ne ati ong, lent ot “nb bebiay @ beak) . .
. . a ccacerdsathetinedl thane ae
wee eee
‘ey | | CHART 1 | 4 . 3 - Month Deposit Rates
Per cent
12 10 4 ' 8 fs) 4 exaen §=3-month bid rates for ACU dollar deposits
as of last day of each month | eseeses 3-month bid rates for Euro-dollar deposits 2
as of last day of each month ) oo 0
1969 . 1970 1971 1972 1973 1974 1975
pret : 2 OTN Re RR eR RRR RL REM ENR EE Re FN ER geen RN me glee rae Kine nr
4-2 Pi Be OPre fe Stem dB gees eda: ee ween LOh eH Boge “Shes, BNE byte’ “ Le I, . . awe, a : re | or ie ied aa . ‘ - be yo why . oo. ' a iD ee ee ne, a a A on a, i ia ee
ne ee ee ee ee
- 18 - 2.0 percentage points higher than the rate on deposits.2/ However, the
spreads between the SIBO rate and the loan rate do fluctuate substantially
over time,
. One interesting aspect relating to the impact of the level of
loan rates on the geographical distribution of Asian dollar loans is the
change that occurred during the first half of 1971, During the early
years of the market, when the Asian dollar loan rates were generally higher than the domestic interest rates in many Asian countries, the volume of loens to the Asian region was relatively low, with a substantial portion
of the funds being reinvested in the Euro-currency market, However, as the
“Asian dollar deposit rates dropped to about 5 to 6 per cent in early 1971,
there was a significant increase in the proportion of Asian dollar deposits being lent to borrowers in the Asian region.2/ The market thus began to achieve one of the basic objectives of its promoters, viz., to finance economic activity within, rather than outside, the Asian region. Ill, Sources of Funds and the Rate of Growth of the Market A, Sources of Funds The suppliers of funds to the Asian dollar market can be grouped
into four categories: commercial banks; central Sanks; non-bank companies;
a EIEEEIERERI ERR nena eae 1/ S.A, Pandit, “The Asian Dollar and Free Gold Markets in Singapore,"
- Finance and Development, International Monetary Fund and World Bank,
Washington, D.C,, June i971, p. 34. 2/ Ibid., p. 34.
.
aceite: Oe ee Pe PRT oT oe Tet “,
eaten Rectan aA eta bancntatabaetnsaie einai cttletirtiatins netted liaise! fie! iataalim biel naain sitchen A . .
| |
O)
eaten ee a
: .
_——
Q)
. Sapte D . ee an Pepica ge sn Me eee Le ee SEP hee eal eee eee favs
SD fe TSN et at, mt Se -
~ ig
,
anid individuals residing outside of Singapore. The commercial banks are those located outside of Singapore including the head offices and other branches of the foreign branch banks in Singapore, These are located primarily in the Pacific region, Europe and the United States, The
volume of funds supplied by foreign central banks (as well as some governmental statutory bodies) is thought to be relatively smal1,2/ The more important suppliers of funds among the non-bank companies are the large multinational” and regional corporations in the Pacific area that
often have a substantiel amount of funds that can be invested for a short
period of time, Among the more important non-resident individuals with
offshore funds in the Asian region are reportedly the overseas Chinese, i
It has been reported that about 30 per cent of the Asian dollar ; funds are obtained from the last two categories of non-bank lenders, especially the multinational and regional corporations .4/ The remaining 70 per cent is supplied by interbank deposits, both from other banks in Singapore and from banks outside of Singapore, The share of interbank deposits in the total increased in the early 1970's, particularly during 1971-73, partly because regional loan demand grew faster than the rise
in nonoank deposit sources,
1/ Far Eastern Economic Review, Hong Kong, Septemver 17, 1973, p. 41.
2/ “The Singapore Asian Dollar Market," World Financial Markets, op, cit., p. 11. ~
3/ In the past, funds were also supplied to the market by large American multinational companies under so-called “swapping arrangements."' The head office of the multinational arranzes to deposit a specific sum in an ACU bank, with this amount, in turn, being borrowed by the Singapore office of the multinational. ‘This pcocedure was mainly utilized ducing the carly 1970's when U.S, controls on foreign capital invesement were in force, Since the removal of these controls in late January 1974, the utilization of "swapping arrangements" has decreased greatly,
4/ Inid., p. 11.
ed
4 «
ance Oh
- 20 -
-4 +
During the early years of the Asian dollar market a high pro-
portion of the funds supplied to the market tended to come from outside tie
Asian area. However, some funds were obtained from Hong, Kong, the
Phillippines, Indonesia and Taivan These were mainly funds that would
have been placed in the Euro-dollar market had there been no Asian dollar market, Around the middle of 1972, Singapore also began to receive funds
from Australia, Latin America and occasionally from Europe. By the end of
1972, about half oz the market's funds were veing obtained from the Asian
area (including Japan and Thailand) and the other half from elsewhere. During 1973 the proportion of funds obtained from Asia and Australia increased gurther.
The maturity structure of ACU bank liabilities indicates that it is mainly a short-term market. About 80 per cent of the liabilities fall in the 8-day to one-year range, with less than 15 per cent of the liabilities having a maturity of more than one year. | :
B. The Rate of Growth of the Market. “Measured in teens of the total assets of the ACU banks, the Asian dollar market has grown at a very rapjd -~ but decelerating -~- rate since its establishment. Starting from a low base at the end of 1968, assets rose about, 300 per cent in 1969 and about 215 per cent in 1970, By
1973 the annual rate of growth had declined to avout 110 per cent and it
fell further in 1974 to a».out 65 per cent,
ee ; 1/ Vong Nang Jang, “rhe Growth of the Asian Dollar Market," Singapore Survey, Euromoney, London, September 1972, p. 15.
-%y 4
STII rr ere am an tomer arere cunnrnnrer nin Che AEP IN Oem, Ne ee tt A EA EN TY Pom OR me Deena ial oem Pear sr ep een tem mere the FO ede ie we Men Hh TM
= age tks srs tnsintine cl ert leah Sree cate) manent tecnmcreee inh incnronnabintbcere tn tdnimiensatonimnnatnsin maine eAeneee ade he tsnalncrmectinantlintesantnaath sbemasenblted , . ey _ . Lote pe ee wee . -. canna
Despite the deceleration, the rate of growth in the market has deen impressive, with total assets/liabilities increasing from approximately $400 million at the end of 1970 to about $10 billion at the end of 1974, Statements made by bankers in the early 1970's about the future growth of 1 the market underestimated the actual rate of growth in the market, Data on : the total assets/liabilities outstanding of the Asian: Currency Units are provided in Table 2,
Table 2, Total Assets/Liabilities of Asian Currency Units
(In millions of U.S. dollars)
End cf Period
' 1958 ; , ' 31 6} 1969 123
J 1970 . 7 390
1971 a . 1,063
Mar, 1972 1,284
June 1972 . 1,619
“Sept, 1972 oo . 2,260
Dec. 1972 2,976
Mar, 1973 3,539 .
| June 1973 oT 3,827
Sept, 1973 4,913
| Dec. 1973 . . 6,277
Mar, 1974 7,192
June 1974 8,112
Septe, 1974 9,297
Dec, 1974 10,357
Mar, 1975 10,930
| June 1975 a 11,015 (
Note: Total liabilitics include "Deposits of Non-banks", “Interbank Funds," and « relatively small amount of "Other Liaoilities",
‘ Source: Quarterly Rulletin, Monetary Authority of Singapore, 4th Quarter, J 1974, Singapore, p. 31 and Far _Kastern Economic neview, Hong Kong, September 26,
1975, p. 38.
pote ee : cea RE Re gee ee Le ae cm RII aS eRe pene ere eee me queeqerepeere«
|
eee ee
~e
--e ee. i es eee. a . : 4 Bee TLD ao LLL LOLI TALE
feted 0 Near i i hatin ai ee a 74 wate beam ee BAG ee ee
sea espe tater tation aemeemtscnadssten hentai Maedrachiteunisindn dei ietoneinadinnte te eQehiceer Pine ated
- 22 -
These data tend to exaggerate somewhat the actual size of the -
market, One reason. for this is that as new bank branches are established
in Singapore, some of the Asian loans that had been made earlier are
branch to the
transferred from the accounts of the head office or European
new Singapore branch. Such loans do not represent "new" business. Another
aspect is that the data include interbank transactions which probably involve
some double counting of actual market transactions.— Although various
/ estimates have been made of the actual size of the market, it would be
. quite difficult to measure this precisely.
An interesting question is: how rapidly will the market grow in
the future? So far the growth path has deen one of deceleration, as is
probably the case with any financiel market growing from a small size.
More specific figures are provided in Table 3 below, indicating the generally
decreasing rate of grouth since 1969.
Table 3. Per cent Increase in As esets/Lianilities of Asian Currency Units (End of period, as compared with a year earlier)
1959 1970 1971 1972 1973 1974 1975(June) 303 217 173 - 180 111 65 36
—_— ‘Source: Same as in ‘vavle 2.
Data for 1975 indicate that the acouth of the market has slowed
sharply, as compared with previous years, and that there is, at present, a
a ; 1/ Dick Wilson, "Banking end currencies: Asian Dollars and Others," Asia 1973
- Yearbook, Fac tostern Economic teview, Hong Kong ,» 1972, p. 67, 2/ Dick Wilson, in the article ciced in the previous footnote, indicates ‘that ‘the aggregate data may overstate the actual size of the market by a quarter to
a third, Ibid., p. 67. . -
Aor RR ee eee ree Oo ee mene ce me te , doe Sean’
fee ee
- 23 -
tendency for the market to consolidate its gains, The slowing in the rate
of growth partly reflects the world-wide recessionary conditions prevailing
in 1975, as well as the increased caution that the Asian dollar banks are now
exercising in granting credits 2! Only moderate rates of growth are now anti-
cipated for the balance of 1975 and early 1976 ,2/ The past growth trend of the market is shown in Chart 2, | IV, Uses of Funds and Related Matters
A, Borrowers, Terms and the Interbank Market.
, The bulk of the borrowers from the Asian dollar market are located in the geographical area stretching from Japan around the perimeter of East Asia to the Indian subcontinent, It is estimated that approximately two-thirds of the credits provided by the market are now extended to customers in the Asian area, These mainly include borrowers in Japan, Hong Kong, Indonesia, the Philippines and Australia, |
A high proportion of the demand for Asian dollars is from banks, international corporations, major national companies, and, to some extent, small enterprises, Asian dollar lending is largely a function of prime names, where first class credit standing is required, Asian dollar loans
are most likely to be extended to multinational firms with a parent
company willing to guarantee such loans, to borrowers engaged in export and
L/ sce iiichael Wong Pakshong, “The Asian Dollar Market Now," Euromoney, London, June 1975, p, 102. 4 . TO 2/ See “Asia Dollar Market: Short-term Outlook is Consolidation," Far Eastern Economic Review, Hong Kong, September 26, 1976, p. 38.
tate ee
—— |
O Total Assets/Liabili
roan es te = te er ener et
sen We he esenees Rene cee. 1 .naatinns eneipas ateeesl
ae ee
Ft et Renae RET A NEOPRENE ONTO OAR OM
| |
1968 1969 1970 1971 1972 1973 1974
CHART 2 ' ties of Asian Currency Units
Ratio scale, Billions of dollars
1975
1976
10.00
1.00
10
Ot
—_——
tae NS ae
Se eo
eg
-7. aes. . ee ee ee 28) ene Oe. ate,
other transactions that provide them with guaranteed access to forcign
exchange, to borrowers that are domiciled in countries where relatively
free convertibility and movement of funds is permitted, and to firms which
have obtained special approval from their exchange control authoritics to
purchase enough foreign exchange to meet their loan repayment obligations.
The loans and investments made by ACU banks are subject to certain
restrictions, For example, foreign currency loans extended by ACU banks to local banks in Singapore are limited to those banks authorized to deal in foreign exchange and to other ACU banks, In the case of investment or
loans in local currency extended through a local bank to residents of
Singapore with the approval of the monetary authorities, such credits can
be extended only for a term of not less than one year, or for industrial
financing or investment only, i.e.; mainly for financing the import of
machine ry or other capital goods.~—
With regard to the lending operations of the ACU banks, it has
been reported that the multinational U.S, banks have an edge over the other
ACU banks because of their extensive branch network in Asia, With a large
clientele of multinational corporations that maintain relations with the banks' head offices, these U.S. banks have been able to build up a sub-
stantial loan base that is helpful in expanding their activities in the
Asian area.2!
—_—__ . . 1/ Roberto Y, Garcia, "The Asian Dollar Market," Central Bank News Digest,
-Central Bank of the Philippines, Manila, July 20, 1971, p. 4. 2/ Wong Nang Jan, “The Growth of the Asian Dollar ilarket," op. cite, P- 16.
PT ne ee nee ME RO Nm ge neces SAT tem Aetna ame
ee ere ee ee en es,
.7 25 -
As indicated by Table 4 below, direct loans by the ACU banks to non-banks €ofstituce only abolt onez-Zoucth of the danks! cocal assets, However, the proportion of direct and indirect loans to non-bank borrowers in the Asian dollar market is undoubtedly considerably higher since a substantial portion of the funds obtained through interbank transactions are eventually channeled to such borrowers, Some of the large American banks in Singapore, for example, use their Asian dollar funds to extend loans to companies and individuals through their branches in the Asian region,
Table 4, Singapore: Total Assets of the ACU Banks . (In millions of U.S, dollars)
; Interbank Funds
End of Loans to In Outside Other Total Period Non-banks Total Singapore Singapore— Assets Assets 19538 pf — 29, nea. n.a. - 30 1969 1 120 —- na, n.a. 2 123 1970 14 370 “13 357 3 390 1971 1& $51 39 812 | 23 1,053 1972 601 2,331 99 2,232 44 2,975 1973 1,214 4,962 262 . 4,700 191 6,277 1974 2,629 7,528 223 7,305 200 10,357
June 1975 3,246 7,586 — 251 7,335 184 11,016
1/ Including inter-ACU transactions,
Source: Quarterly Bulletin, Monetary Authority of Singapore, Singapore, -.2nd Quarter, 1975 p. 31. Totals may not equal sum of components due to rounding,
With regard to credit terms, the Asian dollar market is primarly
a short-term market, The assets of the ACU banks with a maturity of more than
memantine
08 Cm ee eS AE ORR I 98 BO ar RT SOR ALR Se OR BE OE i Oo
ce eee peter at cy ener aie
iO APG ot Pheer my see bide Where A Ieee.
<
RGR CENPSN 11 WDON VP IP Sart mre WY MrT VOCS MCT UBT EC ET SPS str men imc Dini Tiatl 6 ich kee es Dc
Q
a ate a. sand peer A * ‘ ‘ : . : wee ce ot po , . . ae
. \
one year constituted only 7 per cent of the banks' total assets at the end of 1974, (See Table 5 below.) On the other hand, assets with maturities of eight days to three manths accounted for 37 per cent of total assets at
the end of 1974, while those with maturities of over three months up to
12 months comprjsed 45 per cent. By mid-1975, however, the proportion of assets with a maturity of more than one year had increased substantially
to nearly 13 per cent.
Table 5. Assets of Asian Currency Units. by Original Maturities (In millions of U.S. dollars)
End of 1/ ' Up to Over 7 Days Over 3 to More Than Period Total— 7 Dave to 3 Months 12 Months One Year 1970 384 197 77 106 4 1971 1,040 165 361 416 | 98 1972 2,932 . 374 1,072 1,234 251 1973 6,176 662 . ' 2,120 3,096 298 1974 10,157 1,032 3,795 4,595 735 June 1975 10,833 737 3,722 4,924 1,400
Note; Data may not total due to rounding,
1/ Total assets include only balances and fixed deposits with banks, and loans and advances to banks and non-banks, foreign notes and coins, treasury bills, public securities and other securities, fixed assets and all other assets held by ACU banks are excluded, ,
Source: Quarterly Bulletin, Monetary Authority of Singapore, Singapore 2nd Quarter, 1975, p. 32.
Various reports indicate that more medium-term credits are likely to be extended as the Asian dollar market develops further, especially to the petroleum and public utility industries, With the entry into the Asian
dollar market in recent years of the merchant banks, more medium- and long-term
credits are likely to materialize since ‘these banks specialize in such a
eredits,
OPENER RO em Ree RINE INNES RT ED AIOE = SR NE TET I TORT ORE ETI TERESI err em te NR TES R nmr pe rimes some b cacaiiatal
A comparison of the maturity structure in the Asian dollar : market with that for a major component of the Euro-currency market , ‘ indicates that there are substantial differences at the short- and longerend of the market, ‘or example, data on the claims of banks and certain other institutions in the United Kingdom in foreign currencies as of November 29, 1974,2/ indicate that claims with a maturity of less than 8 days were 17 per cent of total claims as compared with 10° per cent for the claims with the same maturity for the ACU banks in Singapore. For the next ‘maturity range of 8 days to 3 months, the proportions were roughly similar at 41 and 37 per cent, respectively, But for 3 months to a year, the proportion for the United Kingdom was 21 per cent and 45 per cent for Singapore, while for maturities of a year or more, the proportions were 21 and 7 per cent, respectively, A fairly wide variety o£ loan facilities are provided by the ACU banks, ‘These include: (1) short-term credits; (2) straight fixed loans of predetermined length for up to one year; and (3) lines of credit where a maximum amount can be advanced against notes within an agreed period (normally for 90 to 180 days), but renewavole within the ceiling after repayment, with a commitment fee being charged for the unused portion of the facility. Roll-over loans are also provided wherein the maturity is fixed ; (usually for two to five years), but the interest rate is adjusted every three to six months at an agreed margin over SIBO, This "floating" rate ' technique for roll-over loans was reportedly patterned after a similar
method used in London and was introduced by one of the major ACU vanks
@) operating in the Asian dollar market, j
. . : % 1/ Sec Quarterly’ sulletin, Bank of En:land, London, September 1975, Table 22,
Aen ee meee cee pam ete acetate mee + ae,
a
- 28 - ; . |
As indicated earlier, corporate borrowers in the Asian dollar mark t are charged interest rates ranging from 0.75 to as much as 3,0
percentage points over the SIBO rate, depending on the bank's assessment of
the credit risk involved, Although this range narrowed somewhat in 1974,
it subsequently returned in 1975 to approximately the zange indicated.
A relatively high proportion of the funds borrowed in the Asian dollar market are used directly for investment (including ship construction), for financing the importation of capital goods, and for working capital
requirements ~/ Of much less importance is the direct financing of trade,
‘particularly for noncapital goods, This is in contrast with the Euro-
dollar market where a substantial portion of export and import bills are financed with Euro-dollar funds, A very important part of the Asian dollar system is an active
interbank market in Asian dollars, This market was reportedly inaugurated
in July 1970 by one of the leading ACU banks .2/ The market is attended by
brokers who serve as a kind of clearing house, They match borrowers with
lenders, but take no part in the deals as principals, At present, all
‘ACU banks operate in the interbank market, As indicated by the data in
Table 1, the brokers’ commission is normally one-eight per cent -- the same as in Lordon, B. Syndicated Loans and Bond Issues Although specific reports are lacking, syndicated loans have reportedly become in recent years a more important feature of the Asian T/ S. Venu, "A Note on the tsian Dollar Market," Bankers’ Magazine, London September 1973, p. 117.
2/ For a list of the foreign banks participating in the {nterbank market, see Wong I'zng Jang, op. cit., p. 15. >
Se alin ateatineme itive Weciatine talaeerh toaeet tee eto ade chanemenen oeticontanint eae tadate te eae neeedoneeeieeamanenein totam ane aiiten Enataiiakenaatedamimnaimeanenmanantan ~ eile atoll
POR NER Nore AL Cpr eg DE I URE Pe ce ee
- 29 -
dollar market 2! With the various maturities on these loans ranging from 3 to 10 years, syndicated loan operations have helped to extend somewhat the short-term nature of the market into the mediurn- and long-term range. However, as indicated earlier, the market is still primarily a market in short-term funds.
' The first Asian-dollar syndicated loan by banks operating in Asia was extended to the Private Investment Corporation of Asia (PICA) in December 1971. The loan was for $10 million, with a four-year maturity, at
an interest rate three-fourths of a percentage point over the six-month
Singapore aaieeieaael offered rate, but: on a three-to-six-month ‘roll-over basis
To allay any concern on the part of the borrower that the interest rate in the
Asian dollar market might not be competitive, the rate for the PICA loan
was based on the rates of six reference panks -- three in London and three
' {n Singapore. The rates were determined by averaging the interbank rates
of the three Singapore banks, except when the average rate quoted by the
three London reference banks was more than one-fourth percentage point below
‘the Singapore interbank offered rate, In general, however, the Asian dollar
rates have remained very close to the curo-dollar rates in London.~
_ The loan syndicate included 15 banks and was headed by the Bank of America, Three Singapore banks participated (Development Bank of Singapore, the Oversea-Chinese Banking Corporation and the United Overseas Bank) and they provided 15 per cent of the credit. The funds were used by PICA for short- and medium-term financing of businesses in the Asian area, Since T/ Dick Wilson, “Southeast isia's Banking Boom," ‘the Banker, London, March 1975, p. 255.
2/ "The Singapore Asian Dollar Marker," World nancial Ilarkets, op. ¢ cit., p. 12.
- 30 -
its establishment, PICA has financed investments in at least seven Asian countries in such industries as textiles, glass, steel, chemicals, hotels, food processing and construction, The PICA loan was something of a milestone ‘ in that it marked the fist time a private Asian-oriented investment organization had obtained a medium-term investment credit from a syndicate of financial institutions operating in Asian capital markets, Other publicly-announced syndicated bank credits have included loans to enterprises in Brunei and Indonesia, In May 1972, a $2755 million, seven-year syndicated loan was extended to Brunei LNG, a joint venture organized for the expoloration and production of natural gas in Brunei by the- Brunei Government, ‘the 2oyal Dutch Shell group and Japan's Nitsubishi Corporation, The floating interest rate on the loan was:set 1 percentage point above
the six-month Euro-dollar deposit rate.. In.1972 2 syndicated bank loan for 40
million was also extended to an Indonesian oil enterprise for a term of five
years, the interest rate being based on the six-month Asian dollar deposit
rate and revised every six months, | . a ; ' | In contrast vith the syndicated loan operations, which appear to | be taking hold fairly we11,~! the Asian dollar bond market has been dis- _appointingly slow in developing. So ‘far there have been five publicly-
announced issues since the Asian dollar market began to operate, but the - secondary market in these bond is still relatively undeveloped. The first Asian dollar bond was issued by the Development Bank of
Singapore in December 1971, Guaranteed by the Government of Singapore
(which owns about 49 per cent of the Bank's shares), the $10 million, 10-
year bond was issucd at par with a coupon rate of 8-1/2 per cent, The
QD l/ Precise measurement is difficult since, unlike public bdond issues, not all syndicated loans are pubicly announced, .
~ 31 -
issue was underwritten by financial institutions located in Asia, Europe and /merica, and Daiwa Securities of Japan served as the lead manager, Although the issue is quoted on the Singapore stock exchange, an active
1/
secondary macket in the issue has not developed.~ The proceeds of the issue have been used by the Bank for financing medium- and long-term capital expenditures in Singapore,
The second Asian dollar bond issue was floated in October 1972,
when the Government of Singapore issued a 7-3/4 per cent, 15-year bond, in
the amount of $20 million, The managing syndicate included the Daiwa © feels
Securities Company of Japan, the Development Bank of Singapore, and four others, Early in 1973 a third bond issue took place when the United Overseas Bank of Singapore issued a $30 million convertible bond, The fourth bdond
was issued in December 1973 when Orient Leasing (Caribbean) N.V, issued at par an 8-3/4 per cent, 9 year and one-month, $10 million bond, This issue, however, was a private placement and was sponsored by a syndicate of Japanese securities firms and banks, led oy Daiwa Securities, The £1fth bond was issued in July 1975 by Keppel Shipyard Ltd., a ‘government-financed shipbuilder
in Singapore. The $12 million, 7-year issue carried a coupon rate of 9.5
per cent and was guaranteed by the Government of Singapore. The underwriting -
syndicate, headed by Daiwa Securities Company of Japan,, offered the bonds
for public subscription mainly to Arab and Asian investors.
1/ Euromoney, London, tlarch 1972, p. 55.
So ee et a A a RR NRO REE EY IE Ne LE AR ERO eR a NRE FREE Laem ame Mee
pice ep Mg ew ime pen m Me tema nee
ere;
QD
tatenettect tint +aesth ANSON hedonic) te Ae een ey esccevadansemastamane ces tier tle thse ata ttn iin ect lt atl Sentra atte ant aos
- 32 -
C. The Shift fway trom Net Lender to Europe
During the Asian dollar market's early years from 1969 to about mid-1971, the market was basically a net lender of funds to Europe. This occurred vecause the supply of funds to the market exceeded attractive and bankable outlets for these funds-in the Asicn Area, with the result that most of the surplus was invested in Europe, Much of this rechanneling of funds was out of sheer necessity in order to earn an immediate return on the funds deposited,
Beginning around mid-1971, however, the market shifted away from being a net lender to Europe and became instead a channel for loanable funds from Europe and other areas to the Asian region,/ Several factors contributed
to this shift, One of these was that many of the banks active in the Asian
dollar during its early years had not had much experience with potential
borrowers in the Asian region, As time passed, however, these banks became
more familiar with the region and the varios lending opportunities, In addition, possible Asian borrowers from the market became more aware of the market's potentialities, Also, during 1959-70 the interest rates in the Asian dollar market were relatively high, often exceeding the domestic commercial rates in many of the Asian countries, but in 1971 the rates declined substantially to levels that frequently made the Asian dollar market @ cheaper source of funds,
With the increase in the volume of lending to Asian borrowers, che Asian dollar market since the latter half of 1971 has generally oeen a net borrower from outside the Asian region, rather than a net lender,
—————— A/ World Financial iiarkets, Morgan Gusranty Trust Company, New York, March 1973, p. ll; and Euromoney, London, November 1971, p. 52. i
?
So
O)
Y
l/ One report indicates that the presence of the Asian dollar market provided
- 33 - | a , ‘ |
V. Some Concluding Observations :
¢ Any assessment of the Asian dollar market's strengths and contributions, would have to conclude that the continued growth of the market -averaging nearly 150 per cent per year during 1970-74 -- is strong testimony to the market's viability, In the early 1970's virtually all prognosticators
of the market tended to underestimate the growth of the market, While still
relatively small compared with the European-based Euro-currency market,
_there is litcle doubt that its rate of growth has »een impressive, Despite
the general deceleration in the rate of growth of the market in the 1970'S, it appears likely that by the end of the decade, the market will have reached a substantial size, The market has made a significant contribution to the economic prosperity of Singapore and to various parts of the Asian region, Most important have been the benefits to the area from a new and expanding source of development finance, In addition, the market has helped to generate. new commercial and financial activities in Singapore!’ as well as to create new jobs and improve the expertise in the banking and financial sector, The market may also have induced some trading and investment institutions to establish their regional headquarters in Singapore,
The performance of the market since its establishment has fulfilled, to a@ very considerable degree, the expectations of its original promoters. The market continues to have all of the strengths or advantages cited in the
first section of this paper, as well as those provided by the various actions
the impetus for the establishment of tvo investment banks in Singapore, Sce Kees van Dongen, "The Asian Dollar Narket," Central Bank News Digest, Central Bank of the Philippines, Hanila, August 31, 1971, pp. 2-4.
. ¢ . OT TOY LE ELT TILL T TL TTI TEENS CATE SY TSAO A EIR AY Ne SE eee: np ain cate a em
Fete et ee rene Mme ER RA ERRNO LEE RN Mee gem ER cee ne Serene nema rnc eee ee Me : MEL Ter
- 34 - ; '
of the Singapore Government, The market is now well on its way toward becoming @ permanent feature of the area, as evidenced by the major commitment in funds, facilities and personnel that a large number of leading international banks have made to the market,
This is not to say, however, that the market does not have any
weaknesses or deficiencies, These do exist and some of the mre important
_ might be cited, One is that the Asian dollar capital market still remains
relatively underdeveloped. A substantial portion of the Asian dollar debt issues have been subscribed from outside Singapore, with only limited interest being shown by Singapore-based irs titutions. This situation has its parallel in the domestic economy of Singapore where the market for fixed-interest debt issues is also relatively underdeveloped. Considering Singapore's stage of development, however, one could not realistically expect a high proportion of the Asian dollar debt issues to be purchased by Singaporebased institutions,
- Another deficiency is that Singapore's foreign exchange market 1s
also relatively underdeveloped. Over 60 per cent of the exchange trans-
_actions in Singapore do not involve the Singapore dollar, and London more
or less disregards Singapore as far as exchange quotations are concerned, Although the Australian banks use Singapore heavily for balancing their foreign exchange positions, the volume is not large, and the importance attached to the Australian operations is an indirect indication of how small the Singapore market is i
T/ Andrew Cartwright, “Singapore 1974 Focus; Financial Center, A Future Based
on Regionalism, “far Eastecn Econonle Review, Hong Kong, August 9, 1974, p. 14,
a
Be Re ee ee nent POA RU Ee RRA OT EO a RRR eR RY RSM RT RS I Re a Emon tem eee ee . : ad, tied
Another weakness -- at least in the short-run --- is that so many new financial institutions have set up operations in Singapore in recent years, that the city-state is now considered by many to be overbanked. One result of this has been rate cutting to the point where many spreads between deposit and lending rates in 1973 and early 1974 were quite unrealistic, 2/
Two other deficiencies of Singapore, at least as compared with
_ Hong Kons, relate to taxes and exchange controls, Singapore continues to impose a 10 per cent tax on the profits derived by the ACU banks from their offshore lending to non-bank clients outside Singapore (or to those approved
- non-bank borrowers residing in Singapore), whereas Hong Kong does not tax the income generated outside the colony by its resident companies upon remittance to the noton; 2! In addition, Singapore.still retains the use of the sterling area list of "scheduled territories" for exchange control purposes, while the United Kingdom since June 23, 1972, has not included Hong Kong in its list of "scheduled territories", This means that many
_ transactions which the Singapore authorities limit through exchange control can be carried out if."washed" through Hong Kong, which is part of Singapore's “scheduled territories," since there is complete freedom of movement between Singapore and Hong kong.
This partial list of the market's weakness and deficiencies is not meant to detract from the generally promising outlook for the market in the
future. One can reasonably expect by the Late 1970's that the Asian dollar 2/ Wark Borsuk, “Lhe Future Development of Offshore Capital Markets in Asia,"
Columbia Journsl of \iorld Business, Columbia University, New York, Spring 1974, p. Sl.
market will constitute a not insignificant part of the total Eurocurrency market, While Singapore may not yet be in the first league of international finance, there can be little doubt that Singapore is now an important banking and international financial center,
It should be noted, however, that the foreipn banks in Sineapore constitute the major dynamic element in the banking structure, The future growth of Singapore as a financial center will depend critically on how successful these institutions will be in achieving their basic goals, Many of these new institutions may be disappointed if they plan to rely on the _ Asian dollarz market as their main bread and butter operation, out few are probably suffering from this illusion, The main justification for the influx of new foreign banks is really the business that they hope to generate in the future,
In view of the developments to date, Singapore's future role as an important regional financial center seems assured, The main foreseeaodle threat to this position would be Lf Japan and/or Hong Kong were to make major changes in their financial systems -- creating an international money market more attractive than that in singapore. But, at present, this seems unlikely in view of the past public statements of the governmental authorities in Japan and Hong Kong. Even if this were to occur, however, it is likely that because of the past substantial rate of growth in the Singapore market, that Singapore will continue to cetain a significant share of the available Asian
dollar business in the region.
ING FG TE feces, embsenntewertns Aiatetshira te namantn bait Soeimlecnasmncettinedte streets set btcetinb tcartirtintahttvataar thane eahiiateassh natisnhtt.s beaten dtnetas stabs tnadiadecttch 2. Dedeahalnsschtnenseaets salle cP aio nail te. tates harass tte dathe De de,
|
- 37 - Appendix A, Measures Taken by Singapore to Promote the ADM
August 1968, The Singapore Government revised its local income
tax low and eliminated the 10 per cent withholding tax on interest income
' from deposits held by non-residents, Hong Kong, which has continued to
retain its 15 per cent withholding tax on such deposits, has not been able to develop its own system of Asian dollar accounts, but has, instead, re-channeled Asian-dollar-type funds to the Singapore. market.
1969. In a move to further improve the freedom of operations in
the Asian dollar market, the Singapore Government exempted such transactions
from “reference to the exchange control authority ."2/ This relieved the
Asian dollar banks in Singapore of the requirement to obtain approval fron, or file reports with, the Singapore exchange control authorities. However, while the Asian dollar banks are allowed to lend to companies or individuals outside the scheduled teritories without prior approval from the authorities,
the banks are required to obtain the approval of the exchange control
‘authorities in the country concerned for loans to vorrowers residing in the
scheduled territories 2!
April 1970. The Government authorized the Asian dollar banks to
issue certificates of deposit denominated in U.S. dollars and to deal in
such certificates among themselves.
cern renee LC
1/ The Asian Dollar, SinSapore International Merchant Bankers Limited, Singapore, January 1973, p. 5. |
2/ For a more detailed description of Singapore's exchange controls over Specified Currencies and Scheduled Territery Currencies, see The Asian Dollar Uarket, First National City Bank, Singapore; January 1975, pp. 8-11.
‘e we
QU
- 38 -
May 1971, Prior to May 1971, Asian dollar loans could not be mae to Singapore residents, but beginning in May 1971 the Government eased this restriction by allowing Asian dollar loans to ve made to exportoriented, hard-currency-earning corporations in Singapore._/
January 1972, Ina move to make the Asian dollar banks more competitive in their operations vis-4-vis the Euro-currency banks in Europe | and to increase their capacity to expand credit, the Singapore Government abolished the 20 per cent minimum liquidity ratio that the banks had to maintain against their foreign currency deposit liabilities. (Singapore banks, however, were still required to maintain a reserve in liquid assets of not less than 20 per cent against their domestic currency deposit ow ane liabilities.) In addition, foreign branch banks were required to maintain a 9 per cent reserve against their net foreign liabilities in the interbank market ;2/ however; this requirement was subsequently reduced and abolished altogether in March 1974, a 7 . . , ‘
March 1972, The Government eliminated the stamp duty of 1/10 of
‘one per cent of the face value of negotiable certificates of deposit and bills
of exchange, A few banks had been issuing NCD's and this move was prompted - i. mainly by the desire to stimulate further the growth of a secondary market in deposit instruments,
April 1972, There was a further relaxation of the separation of
Singapore's domestic financial market from the Asian dollar market when
1/ The date of Nay 1971 is an approximation, The relaxation may have occurred
earlicr. See the Asian Dollar Market, First National City Bank, Singapore, May 1971, p. S.
2/ "Asian Dollar Narket," Internacional Currency seview, London, May/June 1973, p. 20. , 4
Dee eR RNR Ree eae ee NOR I AR ARE EMR tere ae cat cement Mee mere et a te : . —repgner te
anced iecetinanastestietcnaesnitine Mot lad ideensatinatstthsthsinetir-adaee Rititn Dit canee a tttls evident aie ariel eel ents Dee OAeDe TENN > - 39 -
the Government authorized the Asian dollar banks to make foreign-currency loans to locally incorporated firms -- whether owned by residents or nonresidents -- against export orders or letters of credit,
Hay 1972, The Government inzormed the Asian dollar banks that it would approve, on a case-by-case basis, applications by resident companies (mostly approved multinational companies) to hold deposits in Asian Currency Units»! and to borrow from the Asian dollar banks for purposes other than export financing, under certain speci fied conditions, In general, the conditions were that the funds to be deposited must arise from earnings repatriated from abroad or in amounts equal to export earnings that they had received, Previously, foreign exchange earnings had to be converted immediately into Singapore dollars,
June 1972, The separation of the domestic financial market from the Asian dollar market vas further relaxed when the Government authorized local insurance companies and certain government-approved provident and pension funds to invest up to 10 per cent of their funds in the Asian dollar market or in Asian dollar bonds. |
August 1972, In the late summer of 1972 the Asian dollar market was further strengthened by the entry into the Singapore market of two interna-
. 9 tional money brokers from London,2/ These brokers maintain direct telex and
l/ As indicated in Section II, A of this paper, an "Asian Currency Unit" (or
- ACU) is the formal name used by the Singapore authorities for the convertible
foreign currency deposit accsunts maintained by the Asian dollar banks, Banks maintaining these accounts will be referred to as ACU banks. The foreign currency deposits maintained in these accounts are generally denoted by the currency in question, such as Swiss francs or yen, rather than -- for example -- Asian yen, _
2/ These were UMW. Marshall and Co.,and P, Murray-Jones, See Lee I, Niedringhaus LIL, “How the Asian Currency Unit System Works,‘ Euromoney, London, ilay 1973, page 75, A third money broker, Charles Fulton and Company, also began operations in Singapore In Narch 1973, By late 1975, Singapore reportedly had a total of nine international money brokers, five of which were affiliated with foreion firms, See World Financial Markess, Morgan Guaranty Trust Company, New York, September 1975, p. 7.
Mem I mR EE RnR AS eNO SR mn em SE mama cota Fe 2 Re re emma ee vee ee . .
«40 -
telephone communication with London during those working hours when the two markets overlap each other, They assist the Singapore banks in their foreign exchange and international deposit operations, and make it possible for a Singapore bank to act current quotations from London without having to make its own telephone or telex contact,
March 1973, The number of participating banks in the Asian dollar market was expanded when the authorities granted licenses to six new foreign banks to establish branch operations in Singapore. However, these licenses to conduct a banking business were more restrictive than in the past. Foreign banks that had established branches in Singapore by February 1964 have been accorded full equality with local banks to engage in whatever business they saw fit, During 1955-69 there was a hiatus, as the authorities generally declined to license the establishment of new foreign branch banks, but during 1970-72 there was a "second wave" of foreign bank entry into the Singapore market, Although the authorities granted to these. banks Urestricted licenses’,
the main restrictions were that these banks were precluded from accepting
’ Singapore dollar time deposits from the public in amounts less than $.$250,000
and from offering saving account facilities -- restrictions that did not interfere with the banks' ACU business,
Early in 1973, however, the authorities adopted a somewhat novel | approach to allow in a new “third wave" of foreign banks, but at the same time to provide certain safezuards for the domestic retail market which was considered by many to be overbanked, The new banks, which are usually referred to as "offshore banks," were informed by the authorities that they should confine their activities almost entirely to operations in the Asian dollar maricet
with one exception, This was thac ticy could extend Singapore dollar loans
_—
Fe a een poo ROE REE SEN TER RO REREAD RRNR e o E EEE: Br Aee ne een mama wees &
~ Gi -
(and thus maintain the related current account facilities), provided these loans filled a gap in the existing system of credits and services to local industry, In general, such loans could be made if they were funded from the interbank market, were for at least $.$l million, and carried a medium- to long-term maturity, The new banks, however, would not be allowed to open additional branches in Singapore, This move to allow in a "third wave" of banks had the effect of giving the Asian dollar market a much wider scope and depth of operation, . 7 ;
_ July 1973, Three actions were taken by the authorities which had the effect of increasing the potential supply of funds to the Asian dollar market from Singapore residents, Individual Singapore residents were allowed to hold up to $.$100,000 equivalent, in ACU deposits, while corporations were allowed to hold up to $.$3 million equivalent, both without prior approval from the authorities, In addition, approved unit trusts, mutual funds and investment trusts were allowed to hold up to §.$5 million in ACU deposits so long as the amount held is not in excess of 15 per cent of the institution's funds,
August 1973, Nonresidents were exempted from the requirement to pay a tax on the interest received from Asian dollar bonds! issued in Singapore, In addition, the Government reduced from 40 per cent to 10 per cent the corporate income tax an ACU bank interest receipts arising from foreign-cur rency loans to non-bank offshore customers,
September 1973, To improve further the attractiveness of Asian dollar
bonds, the Government waived until further notice the stamp duty on Asian
dollar bond certificates,
LE Re 1/ fsian dollar bonds have, to date,been deaominated in U.S, dollars,
° emer = er te ee emer ; an : . PT Pr
SS ee ce sage pert see
- 42 -
Appendix B. Singapore Banking Institutions (As of December 31, 1974)
A. ACU Banks
‘1. Local Banks 1/ Lee Wah Bank, Ltd. (1920)7
Oversca- -Chinese Banking Corporation, Ltd, (1932) . United Overseas Bank, Ltd. (1935)
Overseas Union Bank, Ltd. (1947)
Development Bank of Singapore (1968)
2. Foreisn Branch Banks with Complete License Chartered Bank (1859)
Hongkong and Shanghai Banking Corp. (1877)
Alegemene Bank Nederland, N.V. (1883)
First National City Bank (1902)
Banque de l'Indochine (1905)
Bank of East Asia (1953)
Bank of Canton (1953)
Bank of America (1955).
Bank of Tokyo, Ltd. (1957)
Bangkok Bank, Ltd, (1957)
Mitsui Bank, Ltd. (1963)
Chase Manhattan Bank (1964)
First National Bank of Chicago (1970) 3. Foreisn Banks with Restricted License
Moscow Narodny Bank (1971)
Banca Commerciale Italiana (1971)
Asien Pazifik Bank.(1971).
Habib Bank (1971)
Drescner Bank (1971)
European Asian Bank (1972)
American Express International Banking Corp. (1972)
Credit Suisse (1973)
Sumitomo Bank (1973)
Korea Exchange Bank (1973)
Mitsubishi Bank (1973)
4. Offshore Banks Bankers Trust Company Marclays Bank International Continental Illinois National Bank and Trust ‘Company of Chicago
1/ The year that is listed after each bank indicates when it began to operate in Singapore,
. %
ewe ee ese ee ee nema a Co ~~ mere remem ee CO ern
1 ee NR eR Gf Se ERE ER et NR EN ER eR Ne
ealtheh sete lena tttast apna tatioastoninnitnne loth attichttndiens nn tebtataestdana onesie aetna : =
4
a a ee RTE Te Lee a cee ee
.
- 43 -
First National Benk in Dallas Marine Midland Bank
Toronto Dominion Banke
National Westminister Bank Republic National Bank of Dallas Fuji Bank limited
Lloyds Bank International Ltd. Bank of Montreal
5. Merchant Banks ; Asia Pacific Capital Corporation
Asian and Euro-American Merchant Bank
"DBS-Daiwa Securities International Ltd,
Dresdner (SEA) Ltd,
’ First Chicago(S) Merchant Bank Pte. Ytd,.
Haw Par Merchant Bankers
Morgan Guaranty and Partners
PICA (Private) Limited
ca Nm apm ene ne
SSS
Shareholders First Natipal City ’ Bank (70%)
Fuji Bank (30%)
Bank of America (30%)
Overseas Union Bank (15%)
Banque de Paris et des Pays Bas (11%)
Dai-Ichi Kangyo Bank (11%)
Dresdner Bank (11%) Kleinwort, Benson (11%) Union Bank of Switzerland (11%)
Development Bank of (Singapore (50%) . Daiwa Securities (40%)
Sumitomo Bank (10%)
Dresdner Bank (100%)
Haw Par Brothers International (100%)
Morgan Guaranty International Finance Corp (40%)
Development Bank of Singapore (35%)
Morgan Grenfell (5%)
Australian United Corp, (5%)
' Bank Hees and Hope (5%)
Industrial Bank of Japan (10%)
B.
- 44 -
Singapore-Japan Merchant Bank
Oversea-Chinese Banking Corp. (28%)
Singapore International Bankers Limited (24%)
Bank of Tokyo (247)
Yamaichi Securities (24%)
Singapore International Merchant Bankers Oversea-Chinese Banking
Corp (42.1%)
Continental Lllinois National Bank of of Chicago (23.7%)
Crown Agents (23.7%)
Yong Pung How (5.3%)
Alexander Discounts
(5.2%)
Singepore Nomura Merchant Beuking Ltd. Development Bank of , , . _ Singapore (35%) Norura Securities (30%)
Sanwa Bank (20%) J. Ballas (15%)
United Chase Merchant Bankers Ltd, ; (42.5%)
Chase Manhattan Bank
‘United Overseas Bank
(42.5%)
Nikko Securities (15%)
William Brasct's Li:aited .
Non-é£cu Banks
Local Banks
Four Seas Communications Bank, Ltd, (1906) . Chung Khiaw Bank, Ltd. (1947)
Industrial and Commercial Bank, Ltd, (1953) . Bank of Singapore, Ltd. (1954)
Far Eastern Bank, Ltd. (1958)
Asia Commercial Banking Corp., Ltd. (1959)
Foreifn Branch Banks with Complete License Mercantile Bank, Ltd. (1856)
Kwong Lee Bank, Ltd. (1934)
Ban Hin Lee Bank, Ltd, (1935)
Bank of China (1936) -
Indian Overseas Bank, Ltd, (1937)
‘William Brandt's (100%)
—~—
Kwangtung Provincial Bank (1939)
Indian Bank, Ltd, (1941)
United Commercial Bank, Ltd. (1948)
Bank of India, Ltd, (1951)
Bank Negarec ,Indonesia (1955-63, 1950) United Malayan Banking Corp., Ltd. (1959) Malayan Banking, Ltd. (1960)
| Tat Lee Bank Ltd, (1974) 3. Merchant Banks Associated Merchant Bank Cycle and Carriage (512%) ‘Associated. Securities (40%) Royal Bank of Scotland (9%) Chartered Merchant Bankers ' Chartered Bank (51%)
Arbuthnot Latham (39%) - Sime Darby Investment
(10%) Citicorp Financial Limited First National City , Bank. (100%) Jardine Fleming (SEA) , _ Jardine Fleming (1007) Lewis and Peat Merchant Bankers Guiness Mahon (70%)
. Shing Kwan (30%)
‘New Court Merchant Bankers Sime Darby (40%) uo ” NLM. Rothschild and Sons (40%) Rothschild Intercontinental Bank (15%) Pierson, Heldring & -Pierson (5%)
.Temenggong Nerchant Bankers Temenggong Securities (1002)
we ene ere mene RN ea cnn ae en ENP MONE EEE REIN On LNB GETS RAE eR ONE RS RR Ue NEE SONNE NE EA my - peers
- 46 -
BIBLIOGRAPHY
Attwood, T.M,, "Singapore: The First Two Years of the Asian Dollar Market," Euromoney, London, Nov, 1971, p. 52.
Attwood, T.M., "Singapore: The Asian Dollar Market,'’ Euromoney, London March 1972, pp. 56-58,
Borsuk, Mark, "The Future Development of Offshore Capital Markets in Asia," Columbia Journal of World Business, Columbia University, New York, Spring 1974, pp. 48-59. ,
Cartwright,Andrew, "Singapore 1974 Focus: Financial Center, a Future Based on Regionalism,'' Far Eastern Economic Review, Hong Kong, August 9, 1974, pp. 13-15.
Emery, Robert F,, "“Eurodollars Go Asian," Columbia Journal of World Business, Columbia University, New York, March-April 1971, pp. 89-91.
Emery, Robert F., The Financial Institutions of Southeast Asia, Praeger Publishers, New York, 1970.
Far Zastern Economic Review, “Asia's Financial Crossroad: The Asia Dollar Market," Hong ong, September 17, 1973, pp. 41-2.
First National City Bank, The Asian Dollar itlarket, Singapore, May 1971, pp. 1-10.
- First National City Bank, The Asian Dollar Harket, Singapore, January 1975, pp. 1-20.
Garcia, Roberto Y., "The Asian Dollar Market," Central Bank News Disest, ventral Bank of the Phillippines, Manila, July 20, 1971, pp. 2-10.
International Currency Review, “Asian Dollar Market', London, May-June 1973, pp. 19-21,
International Economic Letter, “Singapore: A Big Fish in the Asian Dollar Pool," First National City Bank, New York, July 1972, pp. 9-12.°
Ishihara, Michio, "Asian Currency Market Shows Potential for Continued Rapid Growth," IMP Suzvey, International Monetary Fund, Washington, D.C., January 6, 1975, pp. 12-13,
Jang, Wong Nang, "The Growth of the Asian Dollar Market," Singapore Survey, Euromoney, London, September 1972, .pp..15-16.
see ee aw even ee cet nee . - - - - ; : . . rT
. She Se mee em NR Si RE re NG SON EE I eRe emp FF teem epee nen em te ee oe > Se Eee
- 47 -
_Jones, Gresfore, "The Asian Dollar," Far Eastern Economic Review, Hong Kong, May 22, 1969, pp. 445-6,
Lee, S.Y., "The Asian Dollar Market in Singapore," The Malayan Economic Review, Singapore, April 1971, pp. 46-56,
Money Management, "The Outlook for the Asian Dollar Market," London, Jan, -Feb, 1972, p. 33.
Niedringhaus, Lee I., “How the Asian Currency Unit System Works," Euromoney London, May 1973, pp. 73-75.
Orosa, Ramon S., "A New Asia-Dollar Dealing Center," Euromoney, London, February 1974, pp. 71-3.
Pandit S.A, "The Asian Dollar and Free Gold Markets in Singapore," Finance and Development, International Monetary Fund and World Bank, Washington, D.C, June 1971, pp. 32-36.
Pakshong, Michael Wong, "The Asian Dollar Market Now," Euromoney, London, June 1975, pp. 100-2.
Schenk, Chris, "The Asia Dollar Market: Tight Liquidity the Only Threat," Far Eastern Economic Review, Hong Kong, April 1, 1974, pp. 53-55.
Senkuttuvan, Arun, "Asia Dollar Market: Short-term Outlook is Consolidation," Far Eastern Economic Review, Hong Kong, September 26, 1975, pp. 38-9. .
sharp, Ilsa, "Singapore: Contempt Lessons, ‘Far Eastern Economic Review, Hong Kong, March 25, 1974, pp. 48-53.
Singapore International Merchant Bankers Ltd., a Asian Dollar, Singapore, January 1973, pp. 1-20.
Thorn, Philip (ed.), 3 ankine Structures and Sources of Finance in the Far
East, Research Unit of The Bankers London, Warch 1975, pp. 253-7.
Van Dongen, Kees, “the Asian Dollar Market," Central Bank News Disest, Central Bank of the Philippines, Manila, August 31, 1971, pp. 2-4.
Venu, S. "A Note on the Asian Dollar Market," Bankers’ Magazine, London, Sept. .1973, pp. 117-119.
Wall Street Journal, "Singapore is Banking on ‘Asia Dollar’ to Help it Become Big Finance Center," New York, Decemver 27, 1971,
ot °
sic inated i ethane cnet nn oT ent 2 eres ao fon acces raed interes h heaaneinand itis baneeaneam tan tantieun aamdienmedimmeaiontemetietammtaaemnmantiammenramennetnarenaraneattnaa ated oe Tt
© «
t - 48 - World Yinancial Markets, "The Singapore Asian Dollar Market," Morgan Guaranty Trust Co,, Now York, Harch 1973, pp. 8-12.
Wilson, Dick, "Singapore: Asian Dollar Center,’ Singapore Trade and Industry, Singapore, Dec, 1969,
Wilson, Dick, "The Asian Dollar Harket: Singapore Takes the Lead," Financial ‘times, London, August 18, 1970.
Wilson, Dick, "Banking and Currencies: Asiadollars and Others," Asia 1973 Yearbook, Far Eastern Economic Review, Hong Kong 1972, pp. 67-70,
Wilson, Dick, "Southeast Asia's Banking Boom," The Banker, London, March 1975, pp. 253-7.
oe e
———
ERCP ea ane oe een pee se Se ce ERE BFE EE ORR SOU IR ct RN Rt mS A an mE mS -¢ ~~ Ee
Cite this document
Federal Reserve (1975, October 31). The Asian Dollar Market. Ifdp, Federal Reserve. https://whenthefedspeaks.com/doc/ifdp_1975-71
@misc{wtfs_ifdp_1975_71,
author = {Federal Reserve},
title = {The Asian Dollar Market},
year = {1975},
month = {Oct},
howpublished = {Ifdp, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/ifdp_1975-71},
note = {Retrieved via When the Fed Speaks corpus}
}