Global banking crisis averted, but banks and regulators must stay vigilant for more volatility, HKMA CEO Eddie Yue warns

The situation has largely stabilised, but central bankers still need to watch for spillover effects, HKMA CEO says

Hong Kong has ‘very limited’ exposure to the banks in the news, Eddie Yue Wai-man says at the HKMA-BIS Joint Conference in Hong Kong on Friday

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Hong Kong Monetary Authority CEO Eddie Yue Wai-man speaks to the press at the HKMA-BIS Joint Conference at The Rosewood hotel in Hong Kong on March 24, 2023. Photo: Jonathan Wong

Published: 11:34am, 24 Mar 2023Updated: 4:23pm, 24 Mar 2023

Quick action by central bankers prevented the recent banking crisis in the United States and Europe from turning into a global emergency, but Hong Kong and global banks still need to prepare for more volatility, according to the boss of the Hong Kong Monetary Authority (HKMA).

“The situation has largely stabilised, but we still need to watch whether there will be further spillovers, especially to the EU and other US regional banks,” Eddie Yue Wai-man, CEO of HKMA, said in a media briefing at the HKMA-BIS (Bank for International Settlements) Joint Conference in Hong Kong.

Currently, regional lenders are stable, as the US authorities have provided liquidity, Yue said. But central banks still need to monitor the situation.

“Whether there will be further changes, we will need to monitor,” Yue said. “The banks in Hong Kong or the banks around the world will have to get prepared if there should be more volatility coming into the market.”

People queue up outside the headquarters of Silicon Valley Bank in Santa Clara, California, the United States, on March 13, 2023. Photo: Xinhua

Three midsize US banks including Silicon Valley Bank (SVB) collapsed over the past month, unleashing market turmoil that spilled over to Europe, forcing the sale of Credit Suisse to UBS last weekend.