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Nevertheless, the collapse has led to expectations of tighter credit and funding conditions worldwide, including Asia. Borrowing costs for banks are anticipated to rise as funding becomes more expensive amidst a more cautious lending environment. This tightening could slow economic growth and investment in the region.
Regional Resilience and Future Outlook
Overall, the Asian banking sector's resilience is bolstered by diversified funding sources and less concentrated deposit bases. The region's banks are not directly exposed to the failed U.S. institutions in a manner comparable to SVB. This structural difference provides a buffer against systemic shocks originating from the U.S.