2005: Turning on the taps

It was Georges Clemenceau, a French statesman and one of the architects of the Treaty of Versailles, who observed that the minds of military generals were constantly locked into the past, striving to win the last war they fought. The same is often true with regulators responsible for mopping up after a messy financial crisis. Legislators in the US and Europe, fixated on preventing a repeat of the tumultuous events of 2008, continue to weigh down their once-errant banks with burdensome regulation, despite charges of overkill. Asia’s...

The years leading up to Britain’s handover of Hong Kong to China on July 1 1997 were an uncertain time for local residents. Despite the Sino-British commitment to an orderly exit and 50-year transition period, many local citizens were worried that China would send tanks over the border as soon as the British withdrew. Around one million people emigrated from the territory between the signing of the Sino-British Declaration in 1984 and the handover date, many of them to fast-growing Chinese communities in Vancouver, Toronto, San Francisco, New...

Twenty years ago Asia’s top international debt underwriters were all global names, with little competition from regional players, and names like Peregrine and Barings still featured on the region’s equity charts. Investment banking in Asia in 2017 looks very different. The Asian financial crisis, dotcom bust and global credit crisis have put paid to many firms’ ambitions, while the region’s own growth has seen local players displace their global rivals. US underwriters accounted for 65% of all bonds sold in G3 currencies in Asia in 1997. In the...

Barely a week passes these days without a senior investment banker leaving for a financial technology start-up. With jobs less secure and bonuses down, it’s clear that many capital markets bankers see brighter opportunities in the fast-growing fintech industry. “I see traditional banking being impacted by technology big time,” said Lesi Zuo, who left Standard Chartered at the end of June after a 20-year career in structured finance. “The way of analysing risk absolutely has to change, and will change, given the capability of modern technology...

Financial technology, both in Asia and in the west, promises to radically reshape how consumers and corporations save, spend and invest, either substituting or revolutionising many functions traditionally served by highly regulated banks. ‘Fintech’ itself is nothing new: the financial sector has always been heavily reliant on technological innovation. In the late 1980s, Citibank’s former Chairman John Reed was focused on leveraging internal data in order to cross-sell products to all customer segments under the bank’s “Five Is” mantra:...

Be it the macroeconomy, geopolitics or technological changes, we are living in a world of radical uncertainty. Not only do we have to grapple with a world of tepid growth, this fourth industrial revolution – the digital revolution – that we are in, is disrupting whole industries from retail to music. Banking is no exception. In fact, the surprise is that our industry has not been disrupted sooner, being arguably the most digitisable of industries, being made up of bits and bytes. This is in part due to psychology – people think about money a...

IFR Asia’s first issue came off the presses on March 8 1997, and painted a mixed picture of pre-crisis Asia. While Indonesia’s capital markets were clearly roaring, things were already looking rocky in Thailand. Top story was a colourful feature on Indonesia, detailing “flagrant abuses” of the emerging domestic market for MTNs. “We once bought US$80m of a US$100m dollar issue from an MTN programme, but then found out that someone else had bought US$70m of the same programme,” a US banker in Singapore was quoted as saying. Who cared about...

Asia’s economies had gone through a dramatic transformation in the post-World War II era and they were still booming in the 1990s. The Asian Tiger was roaring. The region’s export-driven economies were hungry for cash and investors were falling over themselves to feed that appetite. Huge amounts of foreign direct investment were being sucked into the local economies and reporters for IFR’s global magazine, launched in 1974, were there to cover the big-ticket, cross-border, hard-currency flows. Everyone in Asia was doing well, and everyone...

After a bad market call derailed an early career in bond sales and trading, I had ended up at IFR magazine in London in 1998 covering MTNs and commercial paper. Yes, it sounds as boring as it was, but I was grateful to IFR for the opportunity to get back on my feet. “Marlboro draws on new MTN programme” was my best headline in two years. Enough said. So when I heard “how do you fancy being our Asia bond reporter for a couple of years?” I was practically on the next plane to Hong Kong. That was in 1999. It’s now 2017 and I am still in Hong Kong...

In 1995, I relocated to Hong Kong from London, where I was reporting on UK and European equities for IFR, to help launch a sister publication covering Asia’s rapidly developing capital markets. For a British national, the promise of witnessing the divestment of one of the last vestiges of empire in the return of Hong Kong to China in 1997 was too good to resist. Notwithstanding the uncertainties attached to the projects, both the launch of IFR Asia and the handover of Hong Kong passed without incident. But by July 1997, Asia’s economic skies...

2018 Business as usual. Chinese outflows continue to dominate every aspect of Asian capital markets. US rates rise slightly, but yield curve flattens after US President Trump’s reforms fail to clear Congress. 2019 Chinese investment stalls as growth slows to a touch over 5%, sending mainland property prices lower and rocking global markets. The Bank of Japan experiments with bond issues where not only do investors receive a negative interest rate, but they also have to hand over to the BoJ any other bonds they have in their portfolio. India...