HONG KONG - HONG Kong's chief executive Donald Tsang on Wednesday said the current economic turmoil was more serious than 1997's Asian financial crisis, but had not caused systemic damage to the city's economy.

'The financial tsunami we now face is a global crisis,' Mr Tsang said in his annual policy address.

Its destructive force is much stronger and more widespread than the Asian financial turmoil in 1997.

The recovery will take longer, be more difficult and certainly cannot be taken lightly.

'That said, our financial infrastructure is more robust than it was in 1997.'

The banking sector is one of the most crucial parts of Hong Kong's economy, with global giant HSBC the major force among 23 licensed institutions here.

'Although the current financial tsunami has not caused systemic damage to our financial market, we will not underestimate its impact, nor flinch from meeting the challenges, nor rest on our laurels. We must get the job done,' Mr Tsang added.

Hong Kong on Tuesday announced a new emergency capital fund for the city's banks and guaranteed all deposits until 2010. -- AFP