The East Asian banking sector—overweight?

Commentaries

Table 2. The top twenty countries according to the number of the world biggest 1000 banks
headquartered in them.

in medium-sized, provincial cities. These are likely to be local or at most regional
institutions, but they are still very large by world standards. An example is Shiga
Bank in Otsu, near Kyoto which is ranked number 51 in Japan but has more capital
than the biggest bank in the entire territory of the former Soviet Union.

Data analysis based on The Banker's listing is obviously far from perfect. First, the
ranking uses the value of capital as a criterion. Because we speak about the economic
role of the banking sector, the value of assets would make a more adequate variable.
Would a ranking by asset size vary considerably from the one presented above? It
depends on the ratio of bank assets to capital, which varies strongly between countries.
By world standards, the ratio is very high in Japan and Taiwan and low in Hong Kong,
Indonesia, Malaysia, and most other East Asian states. In total, however, it should be
expected to be close to the global average at the level of the region.

Second, to keep the analysis simple and different from the macroeconomic and
financial measures presented at the beginning, the number of top 1000 banks by
country and city was counted rather than calculating the total value of capital of the
top institutions in one location. This simplification ignores the bank-size differences
within the top 1000 and thus favours the locations with many banks which are big
enough to qualify in the top 1000 but not necessarily the biggest. This perhaps accounts
for the overwhelming supremacy of Italy and Spain over France as demonstrated in
table 1. Despite this flaw I think that, as long as we do not overextend the conclusions
which can be drawn from the tables, they can be used as a reasonable approximation
of the institutional scene in world banking.

Why analyse the data on the location of the top banks' headquarters? I have done
the exercise because information regarding the role of East Asian banks rarely con-
siders the kind of data presented above, despite their simple and direct implications.
Not even The Banker has bothered to write about the spatial concentration of bank
headquarters. In contrast to the commonly used indicators described at the beginning,
the data derived from The Banker do not employ directly any macroeconomic or

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