Hong Kong seeks swift downgrades and provisioning to ensure adequately regulated banks and secure market confidence: panel

Hong Kong is in the process of relaunching itself after Covid pandemic measures were dropped in March, but is faced with geopolitical and interest rate challenges

Authorities are pushing for ‘swift downgrades and swift provisioning’ to ensure the banking sector is adequately regulated to ensure market confidence

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General shot of The Hong Kong Monetary Authority. 2 IFC, Central. 19NOV08

Published: 9:00pm, 26 Sep 2023

Hong Kong is in the process of reinventing itself with authorities pushing for “swift downgrades and swift provisioning” to ensure the banking sector is adequately regulated to ensure market confidence, a panel discussion during the annual conference of the Hong Kong Institute of Bankers (HKIB) concluded.

And while the city is relaunching itself after all Covid-19 pandemic measures were dropped in March, an “unhelpful” geopolitical environment and tightening global monetary conditions remain as major challenges, Arthur Yuen, deputy chief executive of the Hong Kong Monetary Authority (HKMA) said at the conference.

“It’s actually surprising that we only removed all the restrictions on the first of March this year, and so only six months in, it seems like millennia away now,” he said while talking of the city’s “relaunch” campaign.

Since then, the city has managed to avoid major exposure to a series of turbulent events in the global banking environment, including the collapse of several midsize US banks earlier this year, and the takeover of Credit Suisse, Switzerland’s second-biggest bank.

Hong Kong Monetary Authority (HKMA) deputy CEO Arthur Yuen Kwok-hang photographed at HKMA in Central. Photo: Xiaomei Chen

While the events “did not affect [Hong Kong] directly, it doesn’t mean that we shouldn’t learn from it,” Yuen added.

The HKMA will continue to push for “swift downgrades and swift provisioning” to ensure the banking sector is adequately regulated, said Yuen.