International Monetary Fund (IMF) resident representative Sean Craig this week painted a bleak picture for those working in the financial services sector.
Speaking at the Hong Kong Institute of Bankers’ (HKIB) Annual Banking Conference, the seasoned economist outlined several key challenges facing local lenders, among which those pertaining to the sovereign debt crisis in Europe remain the most worrying in his view.
“There are two main concerns facing Hong Kong at the moment,” he says. “The first is the risk of direct spill-overs from the crisis in Europe, and second is the higher uncertainty stemming from the lack of consensus among policymakers on how to respond.”
Much of Craig’s anguish stems from the still-unaccounted-for sovereign debt exposure of the continent’s smaller banks. These institutions, he explains, need to be adequately recapitalised in order to whether defaults