瑞信今日60页长篇：亚洲金融危机已过去20年（1997-2017），将97年的泰国与今日的中国相比，瑞信认为中国与泰国有两个共同点，分别为（1）人为压低的资本成本、（2）资本的错配以及（3）对资本投资的依赖是不可持续的。瑞信认为，在中国去杠杆、允许银行破产的环境下，2018年会对中国的银行下调评级。

■ The devastating effect of AFC. Foreign currency borrowing got bloated as a result of devaluation, sharply higher rates crushed domestic demand. Two-thirds of the borrowers in Indonesia and half in Thailand defaulted. Stock markets plunged 65-85% and banks' P/B multiples plummeted to 0.2x!

■ Any red flags in Asia? Our Banking Pressure Index points to stress in the usual suspects India, China and also, surprisingly Philippines (which may be a false alarm). The BIS method of deviation of credit-to-GDP ratio from its long term trend flashes China, Hong Kong and Singapore. The corporate NPL situation in India remains grim, though China has improved lately.

■ Thailand of 1990s vs China of today. The key parallels are (a) artificially low cost of capital, (b) mis-allocation of capital, and (c) unsustainably heavy reliance on capital investment. While this year GDP growth has been robust on both the domestic and external front, these pose risks to China next year, particularly with government's crackdown on bank risks on- and off-balance sheet besides its newfound focus on SOE as well as local government debt. In 2018, we see two of the three components of investment (industrial and real estate) softening while infrastructure may be affected by local govt debt.

■ As mitigating factors, China has far greater control on domestic growth and cost of capital given a closed capital account and surplus in current account. One key feature to watch will be the "new normal" of single digit M2 growth, especially if China embarks on deleveraging at the economy level. Net-net, we do not see a crash a la AFC but banks' are unlikely to be rerated on a sustainable basis until there is clarity on risk and growth dynamics.