Gauging Procyclicality and Financial Vulnerability in Asia through the BIS Banking and Financial Statistics

We look back at past episodes of financial stress in Asia with a forward-looking perspective. We put ourselves in the shoes of a contemporary observer with the data at hand and ask what evidence was available on the systematic build-up of vulnerabilities. We reconstruct a graphical narrative of banking and financial developments at the time. Our exercise aims to showcase the usefulness of the BIS international banking and financial statistics as a window on the financial system’s procyclicality. We conclude with a real-time forward-looking exercise on financial vulnerabilities, focusing on the implications of the shift in the pattern of credit intermediation from banks to bond markets.