Hong Kong's banking system operating normally today

A Hong Kong Monetary Authority spokesperson said today (Thursday) that Hong Kong's banking system had been operating effectively throughout the day. The spokesperson noted that concerns among members of the public about the Bank of East Asia (BEA) had now largely subsided. The concerns had been prompted by unfounded rumours spread yesterday about the health of the bank.

The spokesperson said that the BEA is in good financial health. "The bank has been able to handle the unusual situation," the spokesperson added.

"Hong Kong's banking system is safe and sound. Local banks are well capitalised, highly liquid, and have good asset quality," the spokesperson said. In view of the heightened concerns about credit and liquidity conditions, the HKMA this morning injected HK$3,883 million into the Aggregate Balance of the banking system. The HKMA spokesperson said that this had been done through the purchase of US dollars against Hong Kong dollars in accordance with Currency Board principles. The spokesperson added that the operation did not target any specific institution but was a general measure aimed at easing interbank liquidity. "The HKMA will continue to monitor the market closely and, if necessary, deploy further measures to inject liquidity into the market," the spokesperson said.

For further enquiries, please contact:
Thomas Chan, Senior Manager (Press), at 2878 1480 or
Hing-fung Wong, Manager (Press), at 2878 1802

Hong Kong Monetary Authority
25 September 2008