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Wall Street banks review contingency plan as China-Taiwan tension escalates

While financial services executives said they view the risk of armed conflict in North Asia as low, they see tit-for-tat sanctions between the US and China that disrupt the flow of finance and trade

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Over the past few months, firms have been stress-testing to see if they can handle the risk of a sudden market plunge -- examining their exposure across the currency, bond and stock trading desks. (Photo: Bloomberg)

Ambereen Choudhury, Natasha White and Denise Wee | Bloomberg

7 min read Last Updated : Sep 26 2022 | 7:02 AM IST

Global financial firms, still smarting from multi-billion dollar losses in Russia, are now reassessing the risks of doing business in Greater China after an escalation of tensions over Taiwan.

Lenders including Societe Generale SA, JPMorgan Chase & Co. and UBS Group AG have asked their staff to review contingency plans in the past few months to manage exposures, according to people familiar with the matter. Global insurers, meanwhile, are backing away from writing new policies to cover firms investing in China and Taiwan, and costs for political risk coverage have soared more than 60% since Russia’s invasion of Ukraine.

“Political

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