Potential buyer for embattled Hong Kong bank

The chairman of the Hong Kong stock exchange, Lee Hon-chiu, has said that discussions are under way with a new potential buyer for the Hong Kong company, Peregrine, the largest Asian investment bank outside Japan.

The bank's future is in doubt after the collapse yesterday of rescue talks with a Swiss financial services company, Zurich Centre.

The Swiss group had proposed to put new capital into Peregrine but analysts say the deal was cancelled because of Peregrine's exposure to the embattled Indonesian economy.

Mr Lee said he believed that Peregrine's crisis would have short-term, not long-term impact.

But the BBC Hong Kong correspondent says the crisis is a major cause for concern in the territory.

From the newsroom of the BBC World Service