(Yicai Global) March 21 -- The Hong Kong banking sector’s exposure to Credit Suisse is “insignificant,” the special administrative region’s monetary regulator said.

The total assets of Credit Suisse's Hong Kong branch were about HKD100 billion (USD12.8 billion), accounting for less than 0.5 percent of the local banking sector’s total assets, the Hong Kong Monetary Authority said on its website yesterday.

“The Hong Kong banking sector is resilient with strong capital and liquidity positions,” the HKMA said.

The total capital adequacy ratio of locally incorporated authorized institutions was 20.1 percent at the end of 2022, much higher than the international minimum requirement of 8 percent, and the average liquidity coverage ratio of category one institutions was 162.3 percent in the fourth quarter, above the statutory minimum requirement of 100 percent, the HKMA pointed out.

To ensure financial stability, the Swiss National Bank announced on March 19 that UBS, the country’s biggest lender, would take over Credit Suisse in a CHF3 billion (USD3.2 billion) deal after the long-troubled bank collapsed last week, acknowledging "material weakness" in its internal control over financial reports, following the failures of Silicon Valley Bank and Signature Bank in the US a few days prior.

As of the end of February, Credit Suisse was the ninth-largest listed structured products issuer, accounting for about 4 percent of the total market in terms of market value of outstanding units, so their overall exposure to the Hong Kong market are “not significant,” the HKMA said.

Credit Suisse's branch supervised by the HKMA and its two licensed arms supervised by the Securities and Futures Commission are open for business, the watchdog added, noting that customers can continue to access their deposits with the branch and trading services provided by Credit Suisse for Hong Kong's stock and derivatives markets.

The HKMA and the SFC will continue to stay in close contact with Swiss authorities and closely monitor financial market operations, it noted.

The HKMA's statement failed to entirely reassure investors, as the benchmark Hang Seng stock index closed down 2.7 percent at 19,000.71 yesterday. It climbed 1.4 percent to 19,258.76 today.

Editor: Futura Costaglione