Overall systemic risks in the local financial markets are manageable despite a deterioration in Sino-US trade talks, Financial Secretary Paul Chan says.

Mr Chan told reporters today that the trade tensions had weakened investor confidence and brought volatility to the Hong Kong and global financial markets.

The dramatic turn in the trade talks is unanticipated, he added.

Mr Chan said the Government needed to keep a reasonable expectation of the trade dispute and had taken precautionary measures to prepare for the unpredictability in Sino-US trade relations.

He noted Hong Kong’s financial system is in good health, adding the Government will closely monitor the banking sector and capital markets and ensure there was adequate liquidity and working capital, as well as good asset quality.