Hong Kong financial system resilient to bank crisis, Lee says

HONG Kong’s financial system is not being significantly affected by the global banking crisis, the city’s top officials said.

“The banking system in Hong Kong is very resilient,” leader John Lee said at a scheduled press conference on Tuesday (Mar 21). “The banking sector is operating smoothly and normally, and the liquidity of the market is also very abundant.”

The banking crisis has unfolded just as Hong Kong reopened to the world, with the city hosting the Credit Suisse Asian Investment Conference this week. The city’s stocks tumbled on Monday, led by banking giant HSBC Holdings, with the Hang Seng Index sinking to a three-month low.

“Generally speaking, if you look at the way that our capital markets like the bank markets work, I think they have been smoothly operating and we see no issues so far,” Christopher Hui, the financial services secretary, said in an interview with Bloomberg Television.

Exposure of the local banking sector and the market to Credit Suisse Group are insignificant, the Hong Kong Monetary Authority said in a statement on Monday. The one-month cost of interbank borrowing fell to about 3 per cent the same day, down from 3.5 per cent earlier in the month.

The Hang Seng benchmark was 0.7 per cent higher at 10.22 am local time on Tuesday, as immediate concerns over the strength of the global financial system dissipated, with HSBC clawing back some gains. BLOOMBERG