By
Bhushan Akolkar
April 12th, 2024
Considering the influence of the US markets, other Asian banking regulators including the MAS have affirmed that the Swiss firm’s takeover will have no material impact on retail customers.
A number of Asian banking regulators have issued statements to debunk and allay fears that the collapse of Swiss banking giant, Credit Suisse Group AG (SWX: CSGN) will have any material influence on their shores. The implosion of Credit Suisse pushed Swiss regulators to initiate a forced takeover of the firm by its rival UBS Group AG (SWX: UBSG) for the sum of $3.25 billion.
Before the market opened today, banking regulators from Hong Kong, Singapore, and Japan have shared how the events in the Swiss banking sector will impact their own financial ecosystem.
The Hong Kong Monetary Authority (HKMA) for instance said the region’s banking ecosystem remains very robust despite the Credit Suisse saga despite the firm having a branch operating in the city. Besides the HKMA-supervised branch, Credit Suisse was also showcased to have two operations under the supervision of the Securities and Futures Commission (SFC).
“All of them will open for business today as usual. 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,” HKMA said, adding that “The total assets of Credit Suisse, Hong Kong Branch amounted to about HK$100 billion, representing less than 0.5% of the total assets of the Hong Kong banking sector. The exposures of the local banking sector to Credit Suisse are insignificant.”
As one of the listed structured product issuers in Hong Kong, Credit Suisse is ranked in the 9th position. In terms of its offering, the bank controls a 4th of the total market in terms of the market value of outstanding units according to the HKMA.
Other Asian Regulators Take
The initial woes of Credit Suisse were succeeded by the failures of three major US regional banks including Silvergate Bank, Signature Bank, and ultimately, Silicon Valley Bank (SVB). The collapse of these entities sent a message to the investing world and depositors and investors became unkind to outfits like Credit Suisse which is known for having yet-to-be-resolved financial constraints.
Considering the influence of the US markets, other Asian banking regulators including the Monetary Authority of Singapore (MAS) have affirmed that the Swiss firm’s takeover will have no material impact on retail customers. According to the regulator, this conviction comes at the realization of the fact that the bank only serves clients in the private and investment banking ecosystems.
The regulator reassured that the bank’s business in the country will continue as usual and noted that its clients will continue to have full access to their accounts and “contracts with counterparties remain in force. The takeover is not expected to have an impact on the stability of Singapore’s banking system.”
Japan and Australia also confirmed little exposure to Credit Suisse with all boasting of the robust nature of their financial ecosystem.