People's Republic of China-Hong Kong Special Administrative Region: Selected Issues

International Monetary Fund

No 2017/012, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper analyzes Hong Kong Special Administrative Region (SAR) banks’ exposure to nonbanking businesses in Mainland China. Hong Kong SAR banks are generally less exposed to riskier Mainland businesses. Despite that, a sharp deterioration in the balance sheet of Mainland businesses, as well as a sharper-than-expected downturn in the Mainland economy could negatively affect Hong Kong SAR banks, raising debt at risk well above suggested estimates. As Hong Kong SAR banks generally have sizable buffers against downside risks, the best approach to such a scenario is vigilance, including maintaining high origination and underwriting standards.

Keywords: ISCR; CR; China; SAR; wage; lending; vis-à-vis Mainland China; labor earnings growth; Hong Kong Sar bank; growth distribution; nonbank Mainland China exposure; Trade balance; Current account surpluses; Wages; Current account; Loans; Global; Asia and Pacific (search for similar items in EconPapers)
Pages: 25
Date: 2017-01-12
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