Fitch cautious about HK banking system’s integration with China
(10 May 2018 – Hong Kong) Fitch has downgraded its view on the operating environment for Hong Kong’s banks due to the increasing integration with China’s financial system.
The warning from the ratings agency comes due to what it sees is the “growing influence of the links between [Hong Kong] and mainland China. […] China’s governance standards … are substantially lower than Hong Kong’s,” Fitch said.
The agency cautioned that “it could become increasingly difficult to distinguish financial sector risks in Hong Kong from those in mainland China”.
Fitch added that its decision to downgrade the rating also took into account Hing Kong’s high macro-prudential risk, which it said was, “due to above-trend credit growth and high property price inflation, which are largely the result of the deepening linkages with China”.