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HKMA Cuts Banks’ Capital Buffers as Outlook Worsens

  • Monetary Authority cuts countercyclical buffer to 2% from 2.5%
  • Economic environment “deteriorated significantly” since June
relates to HKMA Cuts Banks’ Capital Buffers as Outlook Worsens

Photographer: David Paul Morris/Bloomberg

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Hong Kong took measures on Monday to help banks put more money in the hands of local businesses in a move to shore up the city’s deteriorating economy after months of unrest.

The Hong Kong Monetary Authority, which operates like a de facto central bank, said it would reduce the amount of capital lenders have to maintain. The move is intended to make it easier for banks to lend to small and medium size businesses, which have been hit by months-long protests that have caused a precipitous drop in tourism, retail sales and property values.