HONG KONG, March 24 (Reuters) – Hong Kong wants to observe fastidiously for any additional “spillover” from U.S. regional banks, though the town has little or no publicity to the state of affairs in European and U.S. monetary establishments, the Hong Kong Financial Authority mentioned on Friday.
The failure of two U.S. banks and a disaster at Credit score Suisse have rattled monetary markets over the previous week and despatched shockwaves by means of the worldwide banking system. learn extra
Eddie Yue, the chief of Hong Kong’s de facto central financial institution, mentioned the town has little publicity to Extra Tier 1 (AT1) bonds – a kind of contingent convertible debt which are a part of the capital buffers that regulators require banks to carry to guard themselves in instances of market turmoil.
Asian policymakers are scrambling to calm investor nerves about AT1 bonds after holdings of such Credit score Suisse bonds have been written right down to zero, however the ongoing market turbulence is more likely to maintain a lid on recent debt issuance.
“The latest occasions within the U.S. and Europe have little or no affect on Hong Kong,” Yue mentioned.
“The state of affairs is basically stabilised, however we nonetheless want to observe whether or not there will probably be additional spillover, particularly to the opposite U.S. regional banks.”
Hong Kong and world banks wanted to be ready for any additional volatility available in the market, he added.
Reporting by Donny Kwok and Anne Marie Roantree; Enhancing by Jacqueline Wong and Christopher Cushing
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