US subprime mortgage crisis impact on Hong Kong 'insignificant' - Chan |
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Published
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Wed, 17 Oct 2007 09:14
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HONG KONG (XFN-ASIA) - The US subprime mortgage market crisis in the US has not had any systemic implications for Hong Kong's financial sector and its overall impact here has so far been insignificant, a treasury official said.In a written reply to queries from legislator Emily Lau, Secretary for Financial Services and the Treasury K C Chan said the aggregate direct and indirect exposures of banks in Hong Kong to US subprime mortgages are immaterial relative to their total assets.'Such exposures will not have any systemic impact on the financial soundness of the local banking sector,' Chan said.He said the agency's assessment is based on information provided by local banks to the Hong Kong Monetary Authority, the territory's de facto central bank.Chan also said that information gathered by the Securities and Futures Commission also showed that the direct exposure of authorized retail funds to the US subprime market is insignificant, although some of those funds have exposures to asset-backed securities.'As collateralized debt obligations (CDOs) markets in Asia are still in a developing stage, the Asian market is not exposed to CDOs in the same way that the US is,' he said.He also said that according to information gathered by the Office of the Commissioner of Insurance, the aggregate exposure of local insurers to US subprime assets may be considered relatively insignificant.'Although the US subprime mortgage problem did cause a certain (extent of) volatility to the local financial market, no adverse impact on Hong Kong's general investment environment has been observed so far. Hong Kong's fundamentals remain strong,' he said.The Financial Services and the Treasury Bureaum, along with financial regulators in Hong Kong will continue to monitor the developments, Chan added.jun.concepcion@xfn.comjc/net-xfnjcc/xfnntCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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