A Bank of England committee for financial policy underlined global risks linked to Hong Kong's political tensions which led to about $5 billion in capital outflows from investment funds.
The figure amounts to around 1.25 percent of Hong Kong’s GDP, the BoE said, citing calculations and data from Refinitiv and EPFR Global. This was especially relevant to the U.K. given the British lenders’ exposure to Hong Kong totaling around 160 percent of common equity Tier 1 capital.
«The [Financial Policy Committee] judges that the 2019 stress-test scenario for the global economy was sufficiently severe to encompass economic risks from both a broader trade war and tensions in Hong Kong,» the BoE said in its semiannual Financial Stability Report.
Just recently, MUFG also projected capital outflows of up to $6 billion from Hong Kong to Singapore, which was seen as a beneficiary of tensions in the rival Asian financial center. Similarly, Goldman Sachs had also estimated that such outflows totaled $4 billion.
