Nevertheless, Singapore institutions are strong enough to treat the region's banking crisis as an opportunity. The largest lenders are scouting for acquisitions that could help them widen their presence in Southeast Asia. Singapore is also studying further liberalization of the financial services sector. Ten of 25 commercial banks posted losses in the first six months of the year. Institutions that want to raise equity through public offerings have been blocked by a stalled stock market.
Korean banks are among the most inefficient and unprofitable in Asia.
Yet financial reform has moved at a glacial pace. The government is going forward with privatization. Five years ago, Taiwan allowed the formation of 16 private banks. They have a solid foothold, and authorities have promised further financial services liberalization over the next five years. Foreign banks are afforded some latitude but their market share remains small.