Hong Kong regulators warn on private credit risks, advance digital-asset rules

Recent collapses of two US auto parts firms have sounded the alarm bell about risks building in private credit, which can be complex, illiquid, opaque, hard to value and prone to fraud, Hong Kong’s securities watchdog chief Julia Leung Fung-yee said.

Speaking at the fourth ASEAN+3 Economic Cooperation and Financial Stability Forum, the Securities and Futures Commission chief executive said private credit has increasingly become a mainstream alternative to bank lending, helping finance growth and innovation, with global private capital assets under management roughly tripling to US$14 trillion (HK$109.2 trillion) over the last decade.

She added that Hong Kong is leading the regulatory efforts undertaken globally to build a secure and trusted platform for digital assets.

Following public consultations, the SAR government are now finalising regulatory regimes for digital-asset dealers and custodians, which she described as the “last pieces of the puzzle” needed to support a robust digital-asset ecosystem.

Meanwhile, at the forum, Hong Kong Monetary Authority chief executive Eddie Yue Wai-man said the authority remains committed to strengthening collaboration with the ASEAN+3 Macroeconomic Research Office and the Bank for International Settlements to advance regional financial integration and resilience.

Yue noted that AMRO’s timely macroeconomic surveillance supports policy coordination and shock preparedness, while the BIS Asian Office acts as a regional hub for central-bank dialogue and cooperation.