News analysis

Hardening of US stance on Hong Kong to hit financial institutions badly

Extensive reach of US financial system will complicate banking and other matters

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 United States financial system, which covers not only US-domiciled companies or firms incorporated in the US, but also any foreign office of a US-domiciled company, a branch of a non-US bank in the US, as well as any US correspondent account.

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A version of this article appeared in the print edition of The Straits Times on August 13, 2020, with the headline 'Hardening of US stance on HK to hit financial institutions badly'. Print Edition | Subscribe