Hong Kong Monetary Authority: Limited impact of Middle East situation on Hong Kong banking industry

The situation in the Middle East is unstable. Arthur Yuen, Deputy Chief Executive of the Hong Kong Monetary Authority, stated that Hong Kong's banking sector has a small exposure to risks in the Middle East. Currently, there is no significant impact on commercial operations and customers due to the situation in the Middle East. However, a rise in oil prices would affect industries sensitive to oil prices such as transportation, and he urged the banking sector to handle customers' short-term liquidity issues with a more accommodating attitude. He further mentioned that there has not been an increase in cases of assistance from small and medium-sized enterprises recently. The Hong Kong Monetary Authority will continue to closely monitor the impact of the situation on economic activities in Hong Kong. The "Small and Medium Enterprise Financing Task Force" will also discuss whether specific measures need to be introduced. Regarding the default rate of "100% Guaranteed Preferential Loans for Small and Medium Enterprises" rising to 19.3%, Arthur Yuen stated that the high default rate was anticipated when the program was launched. In the event of defaults, the mortgage securities firms and banks will follow the usual procedures for collection.