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Prepared by Ravi Balakrishnan in the context of the 2013 Malaysia FSAP, with research assistance provided by Sanjeeda Munmun Haque. (http://www.imf.org/external/pubs/ft/scr/2013/cr1352.pdf)
As there was only one Japanese subsidiary in Malaysia then (Bank of Tokyo-Mitsubishi) with a small asset base, the vast majority of these claims were likely cross border loans to Japanese corporates.
Given breaks in the BIS data, eurozone banks are limited to those from Belgium, France, Germany, Spain, and the Netherlands.
While there appears a steep change in U.K. bank claims on Malaysia in 1999, this is unlikely to be the case, with claims under-reported pre-1999. This is because as a result of changes in U.K. statistical publications and reporting methodology to the BIS, coupled with changes in confidentiality rules, some claims previously reported by U.K. banks as ‘residual’ or ‘unallocated’ were able to be reported against the underlying country from 1999. There is also some missing data for U.K. banks from 2006–2008 (which also affects other countries in Asia and thus Figure 3).
BNP Paribas only received a license in 2010.
As of end-2010, over 90 percent of Standard Chartered’s assets and around 70 percent of HSBC’s assets were outside of these three zones.
The analysis excludes banks which have insignificant market shares (defined in this note as below 2 percent of total foreign bank assets) to avoid the problem of outliers.
Regarding the Singaporean banks, as they are so well capitalized and given Singapore’s strong cultural, historical, and political connections with Malaysia, their presence in Malaysia appears well anchored.
Foreign claims of BIS reporting banks are made up of cross-border claims and local claims of their subsidiaries and branches in local and foreign currency.
For confidentiality reasons regarding certain aspects of the data, we do not name the main Malaysian banks with overseas operations in Figures 18A-B, but refer to them as Group A-E. For Group E, the large share of profits coming from overseas mainly reflects its Indonesian subsidiary, which contributes around 40 percent to the Group’s net interest income.