Banks are the heart of an economy, when they struggle, everyone feels it. Southeast Asian banks head into the second half of 2026 with solid capital and liquidity buffers on paper, but the lingering fallout from the Iran war and a fragile peace deal are testing these its resilience. 

We discuss:

• Why banking sector health is a leading indicator for the wider economy

• How Indonesia's rupiah weakness, an MSCI downgrade threat, and capital outflows are filtering into banks' dollar bonds

• Why Thailand's elevated household debt is weighing on asset quality, and which lenders are better positioned

• The Philippines' weaker capital ratios at midsize banks

• Singapore's new TLAC and Liquidity Coverage Ratio rules, and how the region's dollar bonds could perform if the Iran peace deal doesn't hold
  
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