Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 219

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 219
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 solutions to improve our capabilities in the detection and prevention of financial crime. – We continued to embed our regulatory management systems focusing on forward-looking analysis, regulatory mapping, and regulatory content for our inventory. – We continued to enhance our frameworks, policies and governance processes to embed regulatory requirements. f

| 148 | HSBC Holdings plcAnnual Report on Form 20-F |

Risk review

Top and emerging risks We use a top and emerging risks process to provide a forward-looking view of issues with the potential to threaten the execution of our strategy or operations over the medium to long term. We proactively assess the internal and external risk environment, as well as review the themes identified across our regions and global businesses, for any risks that may require global escalation. We update our top and emerging risks as necessary. Our current top and emerging risks are as follows.

Externally driven Geopolitical and macroeconomic risks Elections and subsequent changes of government during 2024 have created uncertainty as domestic and foreign policy priorities have shifted. The US in particular is expected to continue to bring about changes to economic and foreign policy that will have broad economic and geopolitical implications. Key economic and financial risks are monitored closely. Major markets, including the US and UK, continued to grow during the second half of 2024, due to expansionary fiscal policies and the positive impact of monetary easing on domestic demand and investment. Similarly, Hong Kong and mainland China also continued to grow, despite ongoing declines in house prices and weakness in consumer spending. The outlook for 2025 remains uncertain as the new US administration intends to enact a significant change in economic and foreign policies that could have an uncertain impact on global growth, inflation and interest rates. In particular, the prospect of additional US tariffs and retaliatory actions on trade has started to weigh on economic growth forecasts and has raised future inflation expectations. Consequently, markets now expect that major central banks will adopt a more cautious approach to lowering policy interest rates during the course of 2025. The prospective impact on individual economies from the imposition of higher US tariffs will depend on the breadth and level of the increases and the dependence of the relevant countries’ exports on US import demand. Emerging markets with higher levels of US dollar- denominated debt and weaker public finances could be further impacted by higher US interest rates and US dollar strength which could result in higher repayment costs and refinancing risks and the associated possibility of sovereign rating downgrades. The country and sector implications of changing global trade policies remains an area that is closely monitored. The implications for export demand from mainland China and