TAIPEI (Taiwan News) – Taiwan’s financial sector is prepared for a worst-case scenario if, as expected, Hong Kong experiences a bank run on Friday (Aug. 16) as a result of protestors making their voices heard by disrupting the financial system.
Reports suggest that protestors of the semi-autonomous region of China are being urged to withdraw as much cash as possible from their bank accounts and through ATMs. The approach aims to create further chaos in the financial hub of Hong Kong, reported Stuff.
The development is concerning for Taiwan, with a financial sector that has NT$1 trillion (US$31.6 billion) exposure in Hong Kong, said Wellington Koo (顧立雄), chief of the Financial Supervisory Commission (FSC), reported the China Times. While capital may be drawn from Hong Kong if the situation spirals out of control, Koo believes the impact could be limited because Taiwan banks based in Hong Kong primarily target corporate finance.
Deputy Finance Minister Juan Ching-hwa (阮清華) said eight Taiwan banks partly-owned by the government currently have a total exposure of NT$200 billion in Hong Kong. The finance ministry is closely monitoring developments and will strengthen risk controls accordingly, said the report.
The months-long protests for greater democracy have roiled Hong Kong, taking a toll on the tourism industry and widening the rift between the people and the police force. According to the Associated Press, armored vehicles from China’s paramilitary People’s Armed Police have been spotted in next-door Shenzhen, fueling fears that Beijing may soon intervene.