HKMA: Advancing transition finance requires enhanced operational resilience and preparedness in banking sector

The Hong Kong Monetary Authority said that advancing transition finance within a sustainable development framework necessitates strengthening the operational resilience and readiness of the banking industry.

Arthur Yuen Kwok-hang, the authority's deputy chief executive noted that as clients undergo transition processes and adjust their business plans, banks may need to revise their financial modeling approaches.

Speaking at a recent event, he said this could lead to changes in customer risk profiles, underscoring the need for clear guidance to be provided to the industry.

Yuen mentioned that the HKMA also requires banks to promote transition plans starting in 2030.

He emphasized that the authority will take a reasonable approach to encourage industry participation in the transition.