The Hong Kong Monetary Authority today injected $500 million into Hong Kong's banking system in an attempt to calm liquidity fears in the region.
The move by Hong Kong's central bank comes on the second day of a bank run on the Bank of East Asia Ltd.’s offices in Hong Kong and Singapore.
Customers are demanding withdrawals in the wake of unconfirmed rumors that the financial institution lacked the stability to survive the global credit crunch.
“The HKMA will continue to monitor the market closely and, if necessary, deploy further measures to inject liquidity into the market,” a spokesman said in a statement today.
The Hong Kong-based Bank of East Asia and Hong Kong government officials have attempted to dispel rumors about the health of the financial company and the city's overall banking conditions.
“The banking system of Hong Kong is safe and sound,” an HKMA spokesman said in a statement issued yesterday. “BEA's capital adequacy and liquidity ratios are well above regulatory requirements.”
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