'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.

Mr 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.'

Asia's economic growth is likely to be at 8.0 per cent this year, slowing to 7.1 per cent in 2009 as weaker global growth affects the region's exports, he said.

Although the region will not experience a crisis similar to that of a decade ago, 'we are going to go through a period of fairly subdued growth over the next six to nine months,' Mr Redward added.

Last weekend a United States bankruptcy court approved the sale to Barclays of key Lehman Brothers assets including its US-based investment banking and trading units. -- AFP