FILE PHOTO: A general view of the financial Central district in Hong Kong, China July 25, 2019. REUTERS/Tyrone Siu/File Photo
Reuters: Exclusive: Chinese banks prepare contingency plans over threat of U.S. sanctions, sources say
BEIJING/HONG KONG/SHANGHAI (Reuters) - Chinese state lenders are revamping contingency plans in anticipation of U.S. legislation that could penalise banks for serving officials who implement the new national security law for Hong Kong, sources at five state financial institutions said.
In worst-case scenarios under consideration by the Bank of China and Industrial and Commercial Bank of China, the lenders are looking at the possibility of being cut off from U.S. dollars or losing access to U.S. dollar settlements, two sources said.
The dollar is the dominant global currency for international payments and central bank reserves.
“We are hoping for the best, but preparing for the worst. You never know how things will turn out,” one of the sources said.
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Update: Chinese Banks Preparing For "Worst Case" Scenario: Being Cut Off From SWIFT, Hong Kong Bank Runs (Zero Hedge)
WNU Editor: For the past decade I have come to believe that in the next two or three decades there will eventually be two global reserve currencies in the world .... the US Dollar and China's Renminbi. After reading the above articles, a part of me is now wondering if it will happen sooner.
