HONG KONG - The consequences of the tougher US stance towards Hong Kong, especially the imposition of sanctions on top officials in the territory as well as from the mainland, are extensive, with severe implications for financial institutions, both local and international, in the city.

This is because of the reach of the US financial system, which not only covers US-domiciled companies or firms incorporated in the US but also any foreign office of a US-domiciled company.