Chart of the Day: Why market fears of a credit crunch did not materialise

Here's how local banks in Asia have plugged financing gaps that Euro exit created.

In Asia, growth prospects have dimmed as its bellwether economy, China, undergo a definite slower pace of growth. Many economies posted their weakest  performance in the first part of 2012 since the Global Financial Crisis. Nevertheless,earlier market fears of a credit crunch did not materialise.

Why?

Pacific Star Holding notes: "Asia is demonstrating remarkable resilience on a couple of fronts in our view, said Pacific Star. Pacific Star said that inter-regional trade links have strengthened considerably in recent years, providing a cushion in the face of waning external demand. Two, even as European banks cut back on lending, local banks in healthier positions have plugged the financing gap."