By David Dolan
TOKYO, Dec 2 (Reuters) - Even after 14 years in the white-knuckle world of stock trading, Ken Masuda doesn't sound like a big risk-taker -- at least when he talks about his own cash.
"I'm more conservative than most Americans when it comes to money," said the 37-year-old Masuda, a Japanese trader who has spent most of his career betting on stocks for a Tokyo brokerage.
"Americans will take a loan to buy a house, and then take another loan to buy another house. That would be unthinkable in Japan. Japan is still a culture of savers."
That frugal culture may be a saving grace for Japan and much of the rest of Asia as the global financial crisis and a worsening economy make it tougher for consumers to repay mounting debt, further straining banking systems and adding to fears of a deep and long worldwide recession.
As more credit card debt, auto loans and other consumer loans sour in the United States and Europe, analysts and bankers believe Asia is unlikely to feel the same squeeze, helped by conservative borrowing and a better outlook for labour markets.
"I don't think it's really the next shoe to drop for Asia," said Jason Rogers, credit analyst at Barclays Capital in Singapore. "I don't think there's the same credit card culture that exists in the U.S. in Asia."
Last month, the head of head of Bank of America Corp warned that the U.S. credit card industry could see record losses as overstretched borrowers find it tougher to repay years of easy credit.
U.S. credit card companies may need to reduce credit limits by more than $2 trillion in the next 18 months, further denting fragile consumer confidence, reckons Meredith Whitney, an analyst at Oppenheimer & Co.
Bank of America, Citigroup Inc and JPMorgan Chase & Co represent more than half of the estimated outstanding U.S. credit cards, and all three firms have considered reducing card exposure, or putting a damper on growth, Whitney said in a recent research note.
U.S. households have accumulated an additional $8 trillion in debt since 1998, bringing the total to $14 trillion, U.S. Federal Reserve figures show.
Japan's economy is roughly one-third the size of the U.S. economy but government data shows its outstanding consumer debt is about $191 billion, a little more than 1 percent of U.S. household debt.
NO HORSES, STOCKS, OR DICE
For Japan, which boasts an estimated $16 trillion in household savings, the push to save may be borne from a tradition of avoiding risk.
Veteran stock traders remember a time when their occupation was looked down on as unsavoury and schoolchildren were warned to shun the vices of horse-racing, crap-shooting and stock markets.
Although attitudes have changed, an aversion to risk has not.
Unlike their Western peers, most Japanese pay off credit card balances in full by the end of month, avoiding interest charges, research firm Lafferty Group said in a report last year.
Also, tighter industry regulation in recent years means that Japanese consumers are less likely to be burdened with heavy debt than their U.S. counterparts.
"I don't foresee a U.S.-style consumer contraction in Japan -- Japanese households typically have less debt, regulators have already stepped in to curb excessive consumer credit, and labour markets are unlikely to face the same pressures as those in the U.S.," said Robert Luton, who heads the office of corporate development at Japan's Shinsei Bank
Shinsei is one of several Japanese banks with extensive consumer finance operations, even offering customers unsecured loans through a network of branches and ATMs. Consumer lenders and credit cards have had their maximum interest rates significantly lowered by new government regulation.
ACROSS THE REGION
In Hong Kong, consumers are better positioned to weather the current downturn than they were a decade ago, when many were overextended heading into the Asian financial crisis. Individuals carry less debt, and the unemployment rate, while rising, remains low by historic levels at 3.5 percent.
"Look at the housing market. People are not overborrowing, as in the past. A lot of speculation -- that has not been the case," said Paul Tang, senior economist at Bank of East Asia.
South Korea suffered a credit card crisis in 2003-2004, but analysts do not expect a repeat, although they say the global financial crisis will weigh heavily on the economy and markets.
One area where the outlook may not be as positive in Southeast Asia, where analysts are concerned about credit cards, loans for motor vehicles and share financing.
Like Japan, the Chinese are likely to be helped by a cultural aversion to taking on large amounts of debt, analysts say.
The ratio of bad consumer loans held by listed firms is now below 1 percent, but is likely to jump by as much as half by 2010, analysts said.
"Bad loans will definitely increase as the economy worsens, the stock market slumps and unemployment increases," said Liu Jun, an analyst at Changjiang Securities.
"But consumer loans other than mortgages are quite small in China, so the impact on banks' bottom lines should be limited." ($1=93.23 Yen) (Editing by Kim Coghill) (Additional reporting by Tony Munroe in HONG KONG, Kim Yeon-hee in SEOUL, Saeed Azhar in SINGAPORE and Samuel Shen in SHANGHAI)