HONG KONG, March 3 (ZXS) -- In successive crises in European and American banks, Credit Suisse, Switzerland's second-largest banking group, founded in 24, recently fell into operational difficulties and was acquired by Switzerland's largest bank, UBS, for 1856 billion Swiss francs (about $30.33 billion), but AT160 (additional tier 172 capital) bonds with 1 billion Swiss francs (about $<>.<> billion) were completely written down to zero. The relevant events have raised public concerns: Will it seriously dampen investor confidence and affect the development of Hong Kong's banking industry?
The Credit Suisse incident has a controllable risk to Hong Kong
According to the announcement issued by the Hong Kong Monetary Authority (HKMA) on the 20th, the total assets of Credit Suisse Bank Co., Ltd. Hong Kong Branch are about HK $1000 billion, accounting for less than 0.5% of the total assets of the Hong Kong banking industry, and the Hong Kong banking industry bears little risk to Credit Suisse. Hong Kong's banking system remains robust and its capital and liquidity position is abundant. On the whole, they do not pose a significant risk to the Hong Kong market.
In response to media inquiries on the 20th, the Hong Kong Insurance Authority said that Hong Kong authorized insurance companies rarely deposit funds with Credit Suisse Group, or hold bonds and derivatives issued by Credit Suisse, with little exposure and little impact from the incident.
Hong Kong Chief Executive John Lee Ka-chiu also said in a meeting with the media on the 21st that Hong Kong's financial and banking system is stable, liquid and healthy, and can cope with market pressure. Hong Kong will communicate regularly with different financial institutions around the world and obtain first-hand market information, and we are confident that the current situation will not have a significant impact on the Hong Kong market.
Expert: Hong Kong's banking system is robust
Zhuang Tailiang, executive director of the Liu Zuode Institute of Global Economics and Finance at Hong Kong Chinese University, said in an interview with China News Agency that he believes that there is a trend of funds flowing back to Hong Kong from overseas, but the specific performance remains to be seen. He pointed out that the US financial sanctions against Russia and the Credit Suisse crisis have exacerbated many people's doubts about the security of wealth in the United States and Switzerland, so he considered transferring funds to Hong Kong. As an international financial center, Hong Kong's banking system is relatively stable and the inflow and outflow of capital is also very convenient.
The AT1 bonds did not have a serious impact on the Hong Kong market
Affected by the Credit Suisse incident, international financial stocks fell, affecting the financial sector of Hong Kong stocks. Some of the insurance, oil, coal and other stocks listed on Hong Kong stocks have been adjusted to a certain extent.
Wu Lixian, a securities strategist at China Everbright Securities International Co., Ltd., said in an interview with China News Agency that the liquidity problem of financial institutions is the biggest cause of investor concern, and the European and American banking crisis has increased investors' concerns about the stability of the financial system, thus affecting the performance of bank stocks.
Commenting on Credit Suisse's approximately US$172.1 billion AT1 bonds to be cancelled to zero, Mr Ng said that AT<> bonds are biased towards high-risk, high-return investments in the bond market, and can only be sold to professional investors through private banks in Hong Kong, believing that the Hong Kong market will be less affected. (End)