No Evergrande fallout in Britain

Date:

Bank of England Governor Andrew Bailey said that resolving Chinese property developer Evergrande Group’s struggle with $300 billion in liabilities has been fairly protracted. But did not threaten financial stability in Britain. China was clearly trying to reduce its reliance on the property sector for growth. Also, Bailey told parliament’s Treasury Committee that the BoE was closely watching events at Evergrande.

He added that they are seeing contagion within China. But it seems to be being kept under control. They are managing it by effectively preferring onshore to offshore creditors. But it is a concern to them. Two banks in Britain, Standard Chartered and HSBC, have large exposures to east Asia. BoE Deputy Governor Jon Cunliffe said that Britain’s banks were resilient, holding enough capital to withstand another COVID-19. And that too without requiring government help.

Lawmakers also asked about the end of the use in Britain of London Interbank Offered Rate (Libor) for loans. This was one of the biggest changes in markets in decades. There is also concerns about financial stability risks. Bailey stated that he is very pleased with the way it has gone. While the demise of Libor in Britain has been smooth after six-and-a-half years of preparations, there was still work to do in whittling down the number outstanding contracts.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

spot_imgspot_img

Popular

More like this
Related

Switzerland Weighs Concessions in Trade Talks With U.S. While Seeking to Protect Ties With European Union

Switzerland has been weighing possible concessions it might offer...

Intel’s New Leadership Signals Strategic Pivot in Foundry Business Amid High Stakes

A significant transformation has reportedly been set in motion...

Wall Street’s Surprising Resilience Amid Main Street’s Mixed Signals

A notable dissonance between economic sentiment and financial activity...