SINGAPORE, Sept 26: Asia’s banking sector is fundamentally sound, despite the US financial crisis, but the region will see slower economic growth, a top Barclays economist told reporters in Singapore Friday.

We think the banking sector in this region remains generally in good shape, Peter Redward, the banking giant’s chief economist for Asia excluding Japan, said.

Asia was hammered by a financial crisis in 1997 and 1998 when key economies plunged into recession following a currency meltdown.

Redward said it was unlikely the crisis in the US financial sector, whose victims include Wall Street investment bank Lehman Brothers, will send Asia into another tailspin.

There are some vulnerabilities, particularly in South Korea largely because South Korean banks tend to be more leveraged than other institutions in Asia, he said.

Singapore and Hong Kong also have risks because of their status as international financial centres.

Having said that, we think that in all three cases (Hong Kong, Singapore and South Korea), the banking systems remain fundamentally sound, Redward said.

We think that this region’s financial sector is likely to have some pressure put on it by the global environment but fundamentally we don’t see significant problems emerging.--AFP