Clue: definitely not India and Vietnam.
Singapore and Hong Kong were rated 'stable' along with most Asian countries.
Philippines was the only country in the region whose banking system got 'positive' rating reflecting improving outlook in four key areas: Asset Quality Funding & Liquidity Profitability Capitalization.
India and Vietnam meanwhile got 'negative' rating.
Here's more from Moody's:
The broad credit outlook for banks in the Asia Pacific region in 2013 is stable. We expect Asian banks1 to remain largely insulated from the negative credit pressures that are affecting their peers in many Western economies. We see three major drivers of this stable outlook:
» Economic resilience. While many Asian economies have been affected by a weakening of external demand in 2012, they generally have weathered the global downturn. Economic recovery will gradually take hold in much of the region in 2013.
» Relatively accommodative monetary policy. Monetary policy in the world’s three main fully convertible currencies (the dollar, the euro and the yen) will remain loose or undergo further loosening in 2013. This scenario means that interest rates will remain low in much of Asia, making an asset quality shock unlikely during this year in most Asian countries.
» Most Asian banking systems continue to show strong liquidity when compared to global norms, as well as relatively robust capital buffers. The vast majority of Asian banks are ready to adopt Basel III capital standards, which are being implemented in much of the region in 2013 even though some Asian regulators have announced delays.
Six key themes for Asian banks in 2013:
1) The modest cyclical deterioration, now apparent, in asset quality should fade by midyear;
2) Very low interest rates are providing further reassurance that an asset quality shock is unlikely this year, but they are also creating longer-term risks;
3) We expect Chinese banks to avoid a hard landing but longer-term issues remain unresolved;
4) Asian banks are well-placed to meet the capital standards of Basel III that will be implemented in much of the region this year;
5) We expect Asian banks to carry on with their overseas expansion, though at a more moderate pace than that evident in 2012; and
6) Asian regulators will focus on ensuring that new generation capital instruments meet Basel III requirements, but they will still refrain from seeing any urgency in pressing ahead with broader resolution tools that could impose losses on creditors.
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