The impact of the U.S. subprime mortgage crisis has been limited in Asia and will be limited because of ample cash in the region's banking systems, a top Citigroup official said on Wednesday.

But market volatility and managing everyday risks would remain a challenge for financial institutions in the region, Robert Morse, managing director and CEO Asia Pacific (Markets and Banking), told a business conference.

Morse noted leveraged finance in Asia had continued through August and September, when the crisis deepened, due to strong liquidity at local banks.

The subprime mortgage crisis has primarily been a U.S. phenomenon and the impact on Asia has been limited and, we think, will be limited, he said at the Fortune Global Forum.

Separately, the head of UBS Securities in India said Indian firms were still pursuing overseas acquisitions, but the size of the deals were smaller because of the credit crunch.

Companies are finding they cannot leverage that much debt on the target, said Manisha Girotra, UBS Securities managing director, India.

There is ample liquidity here, which can be tapped for deals of, say, up to $1 billion. But for something that is $6-7 billion, it could be a problem, she said.

Citi's Morse said investors' focus may shift more to emerging markets as a result of the subprime crisis.

We are seeing a fundamental shift in the focus of economic activity from so-called developed markets to so-called emerging markets because of the long-term growth prospects of emerging markets in Asia, Latin America and also eastern Europe, he said.

Market volatility was likely to continue, which meant the ability to assess and manage risk adequately would be critical to financial institutions in emerging markets.

We see volatility everyday -- it is at an all-time high now -- and we live in a very risky world, he said.

In addition, the depreciation of the dollar had made it more imperative to hold non-dollar assets, Morse said.

The dollar fell to record lows against the euro and a basket of major currencies on Wednesday as investors speculated that the Federal Reserve could signal additional rate cuts after a widely expected reduction later in the day.