Asia's regulators say banking system is robust and stable after UBS-Credit Suisse takeover deal

Regulators successful Asia issued reassuring statements Monday that their banking systems remained robust and unchangeable aft Swiss banking elephantine UBS agreed to bargain its rival Credit Suisse for $3.25 billion.

Swiss regulators played a cardinal relation successful orchestrating the forced takeover, to stem a larger banking situation that would endanger the planetary system. The woody was announced earlier markets opened Monday. Last week, Credit Suisse logged their worst play diminution since the onset of the coronavirus pandemic. 

The developments travel soon aft the illness of Silicon Valley Bank, which led to U.S. regulators backstopping SVB's uninsured deposits and offering caller backing for troubled banks. The slew of headlines astir the planetary banking turmoil person heightened volatility and capitalist fears of a broader crisis.

The Hong Kong Monetary Authority said the city's banking assemblage is resilient with beardown superior and liquidity positions. Credit Suisse's operations successful the metropolis comprise a subdivision supervised by the HKMA and 2 licensed corporations supervised by the Securities and Futures Commission. 

"All of them volition unfastened for concern contiguous arsenic usual. Customers tin proceed to entree their deposits with the subdivision and trading services provided by Credit Suisse for Hong Kong's banal and derivatives markets," HKMA said.

"The full assets of Credit Suisse, Hong Kong Branch amounted to astir HK$100 billion, representing little than 0.5% of the full assets of the Hong Kong banking sector. The exposures of the section banking assemblage to Credit Suisse are insignificant," it added.

As of the extremity of February 2023, Credit Suisse was the ninth-largest listed structured merchandise issuer successful Hong Kong, accounting for astir 4% of the full marketplace successful presumption of marketplace worth of outstanding units, HKMA said.

In a akin move, the Monetary Authority of Singapore said Credit Suisse operations volition proceed successful the city-state with "no interruptions oregon restrictions."

Credit Suisse customers volition proceed to person afloat entree to their accounts and "contracts with counterparties stay successful force. The takeover is not expected to person an interaction connected the stableness of Singapore's banking system," MAS said.

MAS added that UBS and Credit Suisse bash not service retail customers, arsenic their superior activities successful Singapore are successful backstage banking and concern banking.

The cardinal slope said it volition stay successful adjacent interaction with Swiss regulators, UBS and Credit Suisse arsenic "the takeover is executed, to facilitate an orderly transition, including addressing immoderate interaction connected employment."

As for Japan, the country's banking strategy is improbable to beryllium affected by the deal, said Cyrus Daruwala, managing director of IDC Financial Services.  

"I deliberation the vulnerability to a ample wealthiness manager oregon an plus manager similar Credit Suisse oregon UBS, successful wide speaking terms, would beryllium astir 4% of their portfolio," Daruwala, told CNBC's "Squawk Box Asia" connected Monday.

Christopher Kent, adjunct politician of the Reserve Bank of Australia, besides emphasized home banks are robust contempt the planetary panic triggered by banking failures successful the U.S.

"Conditions successful planetary enslaved markets person been strained precocious pursuing the nonaccomplishment of Silicon Valley Bank successful the United States," helium said in a speech connected Monday.

"Volatility successful Australian fiscal markets has picked up but markets are inactive functioning and, astir importantly, Australian banks are unquestionably strong."

Banks are already good precocious connected their enslaved issuance plans for the twelvemonth and could defer "for a while," Kent said. "Even if markets stay strained . . . Australian banks' issuance volition proceed to payment from the spot of their equilibrium sheets."

Overall, IDC's Daruwala said banks successful the portion person "very, precise little" vulnerability to Credit Suisse. "I don't deliberation it's going to origin a ripple effect successful Asia astatine least."