Financial authorities in Asia have reassured the public that the recent turmoil at Credit Suisse will not impact the stability of local lenders. The Monetary Authority of Singapore (MAS) has announced that following the purchase of the Swiss bank by UBS Group over the weekend, Credit Suisse will continue to operate as usual in the city-state with customers having full access to other accounts. The central bank also stated that it will closely monitor the domestic financial system and international developments, and stands ready to provide liquidity to ensure that Singapore’s financial system remains stable and orderly.
Hong Kong’s Monetary Authority (HKMA) and the city’s Securities and Futures Commission also stated that Credit Suisse is open for business as usual, and its local assets of 100 billion Hong Kong dollars represent less than 0.5% of the total in the Chinese territory’s banking sector. The HKMA further stated that the local banking sector’s exposures to Credit Suisse are insignificant, and that the sector is resilient with strong capital and liquidity positions. The Japanese Chief Cabinet Secretary Hirokazu Matsuno echoed this sentiment, stating that he did not expect the turmoil at lenders in Europe and the United States to spread to local banks, and that Japan’s financial system is stable as a whole.
These announcements come as markets in Asia slid in early morning trading on Monday amid persistent jitters over the health of the global financial system, with key indexes down in Japan, South Korea, Hong Kong, and Australia. However, China’s blue-chip CSI300 and Shanghai Composite Index made gains, as new monetary-easing measures by Beijing helped to offset concerns about global banking. On Sunday, UBS, Switzerland’s largest bank, agreed to buy Credit Suisse for 3 billion Swiss francs amid a growing crisis of confidence in the global banking system. The Swiss government said the deal was necessary to prevent economic turmoil from spreading throughout the country. Credit Suisse, which last week received a $54bn cash injection from the Swiss central bank, is one of the world’s largest wealth managers and one of 30 banks considered to be of systemic importance to the global economy.
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