Graying Asia: How Aging Is Reshaping Banking

Haibo Li, Estelle Liu, Yinqiu Lu and Anne Oeking

No 2026/150, IMF Working Papers from International Monetary Fund

Abstract: This paper explores how demographic shifts, particularly population aging, are reshaping banking in Asia-Pacific’s bank-dominated financial systems. Using household surveys as well as bank-level and country-level panel data, we show that aging populations are associated, with shifts in bank portfolios away from traditional loans (with lower loan-to-deposit and loan-to-asset ratios), driven by changes in households’ financial behavior. These changes affect banks’ funding structures, profitability, and risk profiles, with implications for financial stability. We also provide new evidence on cross-border dynamics, showing that demographic divergence spurs asset reallocation toward younger economies. Our findings highlight evolving risks and supervisory challenges as demographic transitions unfold unevenly across economies.

Keywords: Population aging; demographic change; bank balance sheets; household financial behavior; cross-border asset allocation; IMF working paper; funding structure; bank portfolio; bank-dominated financial systems; Aging; Loans; Financial statements; Asia and Pacific; Global; Europe; Middle East and Central Asia; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 30
Date: 2026-07-17
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