Hong Kong’s regulators have stepped up scrutiny of the city’s banking sector, prompted by a spike in lending to China-based companies this year that has coincided with a threat to global liquidity as the US Federal Reserve begins withdrawing its monetary stimulus.

The city’s de facto central bank played down the risks of increased lending into China at a briefing yesterday, but said the threat that hot money could drain away from the region had prompted it to take extra steps to protect liquidity among local banks.

Fears have grown over Hong Kong banks’ exposure to China after net lending rose sharply from $168bn to $430bn between 2010 and 2013, when it was 40 per cent of total assets, according to the Hong Kong Monetary Authority’s reporting of data from the Bank for International Settlements.