Recent Bank Crises Unlikely To Affect Us: KC Chan

A former Secretary for Financial Services and the Treasury, KC Chan, said on Sunday that he doesn't think the recent bank crises in Europe and the United States will impact other financial institutions.

Speaking to reporters, Chan, who's now an adjunct professor at the Hong Kong University of Science and Technology, said regulators have been working to reduce inter-reliance between banks since the 2008 financial crisis.

“[In 2008,] when one financial institution fails, it also impacts the others, therefore you start a chain reaction and bring down the whole financial system,” he said.

Chan cited the recent Credit Suisse crisis as an example and highlighted that financial regulators have made “brutal” and “drastic” decisions to isolate the problem.

“The lesson is not to help the stockholders or bondholders of that company, but try to reduce the risk to the whole system,” he said.

Chan also expressed his thoughts on the strained relationship between China and the US, saying it will be a constant feature of the global trading and financial system going forward.

He emphasised that regulators must be prepared to handle ongoing challenges that may arise from it, as it could impact supply chains and investment.

“It is something we have to live with,” Chan said.