Difficulties among banks will be alleviated. Problems facing banks are multifaceted. First, stability in the financial markets is only in relative terms, compared with the volatility in 1998. The Asian financial crisis is not yet over. As problems in some area have not been eliminated completely, it is still possible for large fluctuation to re-emerge.
Banking institutions have to stay alert.
Second, growth will be very slim though economic recovery is expected. Third, the real sector of the economy will continue to shrink in the first half, thus reaching the trough of the recession cycle. It could then be the most painful period, in which corporate bankruptcies will increase further and unemployment will edge up. Bad debts may rise further among commercial loans. Mortgage loans may also show a higher default rate.