Hong Kong activist, Chen Haotian, calls for a run on China banks in Hong Kong on 16 August 2019: How will the Hong Kong govt counter this?

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WORLD NEWS

Chinese Banks Activate Contingency Plans to Prepare For Hong Kong Bank Run

But say they have plenty of cash to deal with demand.

Published

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Chinese banks have activated contingency plans to prepare for a possible bank run by protesters in Hong Kong but say they are confident they can deal with any problems.

As we reported yesterday, activist leader Chen Haotian called on fellow protesters to target Chinese banks by simultaneously withdrawing all their money.

A viral post also appeared on the Hong Kong version of Reddit encouraging demonstrators to withdraw their money and convert it to U.S. dollars in order to sabotage Beijing’s financial autonomy.

In response, Bank of East Asia, DBS, OCBC Wing Hang Bank, and Hang Seng Bank have all reportedly activated contingency plans and are monitoring large withdrawals.

However, the banks, seeking to avoid a panic, all assert that they can deal with any planned bank run, arguing that Chinese New Year season is much worse.

HSBC said it “has sufficient supply of banknotes” to deal with demand.

“I don’t think it will be a problem,” George Leung Siu-kay, an adviser to HSBC, told the South China Morning Post.

OCBC Wing Hang Bank also said that Friday was a “normal banking day” and that no problems were encountered.

Hong Kong residents are allowed to withdraw from HK$20,000 (US$2,548) to HK$40,000 from ATMs.

Chinese Banks Activate Contingency Plans to Prepare For Hong Kong Bank Run

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Excerpts from:

Investors Are Worrying About Hong Kong Banks as Protests Roll On

 Updated on 

Investors are getting anxious about the impact anti-government demonstrations are having on Hong Kong’s banks.

“Things will be going down if people start seeing Hong Kong, which is an international financial center, differently,” said Ronald Wan, CEO of Partners Capital International Ltd. “There will be concern over banks if we see significant capital outflows as they will lose support for business.”

It’s not just anti-government demonstrations, now in their 11th week, that are hurting banks in the city: a slowing economy, weaker Chinese currency — down 2.5% since the end of June — and the trade dispute with the U.S. create a troublesome mix. And it’s showing in the stock market.
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HSBC Holdings Plc’s shares have plunged 13% in just three weeks and are near the most oversold since at least 1989, while BOC Hong Kong Holdings Ltd. has dropped 12% this month. Lenders’ losses have weighed on the benchmark Hang Seng Index, which is among the worst-performing major equity gauges in the world this August, though it rose 0.9% Friday.
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Citigroup Inc. has turned more cautious on Hong Kong banks, saying in a research note last week that the weakening yuan would cause a “drastic” decline in loans to mainland China clients and hurt asset quality. “We see bigger earnings risk to Hong Kong banks,” analysts including Yafei Tian wrote, downgrading the rating on BOC Hong Kong to neutral. They also said there’s 20% to 60% downside in the sector’s earnings per share.

 With assistance by Jeanny Yu

https://www.bloomberg.com/news/articles/2019-08-16/investors-worry-about-hong-kong-banks-as-protests-roll-on-and-on?cmpid=socialflow-twitter-business&utm_medium=social&utm_campaign=socialflow-organic&utm_content=business&utm_source=twitter

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Hong Kong’s banks say they have adequate cash to meet demand, even as calls circulate online for protesters to empty out ATMs

  • City’s lenders said they have contingency plans in place, monitoring situation
  • Hong Kong’s Financial Secretary said the city’s banking system is ‘very solid’ and has ‘adequate liquidity’

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Taiwan may withdraw capital from Hong Kong in bank run scenario

Hong Kong protesters are being called upon to withdraw money and disrupt financial stability in the financial hub

HSBC ATMs in Hong Kong (CNA photo)

HSBC ATMs in Hong Kong (CNA photo)
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TAIPEI (Taiwan News) – Taiwan’s financial sector is prepared for a worst-case scenario if, as expected, Hong Kong experiences a bank run on Friday (Aug. 16) as a result of protestors making their voices heard by disrupting the financial system.

Reports suggest that protestors of the semi-autonomous region of China are being urged to withdraw as much cash as possible from their bank accounts and through ATMs. The approach aims to create further chaos in the financial hub of Hong Kong, reported Stuff.

The development is concerning for Taiwan, with a financial sector that has NT$1 trillion (US$31.6 billion) exposure in Hong Kong, said Wellington Koo (顧立雄), chief of the Financial Supervisory Commission (FSC), reported China Times. While capital may be drawn from Hong Kong if the situation spirals out of control, Koo believes the impact could be limited because Taiwan banks based in Hong Kong primarily target corporate finance.

Deputy Finance Minister Juan Ching-hwa (阮清華) said eight Taiwan banks partly-owned by the government currently have a total exposure of NT$200 billion in Hong Kong. The finance ministry is closely monitoring developments and will strengthen risk controls accordingly, said the report.

https://www.taiwannews.com.tw/en/news/3763925

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Hong Kong Activist Leader Calls For a Run on the Bank

Chen Haotian asks citizens to withdraw cash deposits to target Chinese banks.

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Prominent Hong Kong pro-independence political activist Chen Haotian has called for a run on Chinese banks, asking that everyone withdraw their money on the same day.

Haotian is a founding member and the convenor of the Hong Kong National Party.

Arguing that large scale protests have only led to injuries and escalating police brutality, Haotian believes another method could be used to severely undermine China’s influence – a good old fashioned run on the bank.

He suggested that another method could be used, namely, impacting the financial system,” reports China Press.

“He called on Friday (August 16) that Hong Kong citizens take out all bank deposits. The primary goal is Chinese banks, but he said other banks should also be targeted, otherwise Chinese banks can borrow money from other banks to solve problems.”

Hong Kong has been rocked by weeks of violent protests by pro-independence campaigners. Earlier this week, riot police stormed Hong Kong International Airport to clear them out.

As we reported on Tuesday, while China is unlikely to invade using PLA troops, experts have suggested that soldiers could be disguised as Hong Kong police.

Hong Kong Activist Leader Calls For a Run on the Bank

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1 Response to Hong Kong activist, Chen Haotian, calls for a run on China banks in Hong Kong on 16 August 2019: How will the Hong Kong govt counter this?

  1. Ali Z says:

    Ha ha…I admire his audacity and courage to speak on how HK youths can inflict fatal blow to China’s banks !

    If he had not opened his mouth, people would not have known he is so stupid, an idiot, a nincompoo. ..completely out of touch with the reality of the current financial might of Chinese banks ..
    He is like what the Chinese say, a frog in a well (井底之蛙) !
    But I am more surprised by the media coverage of this idiot…judging from the mass of reporters surrounding him..!

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