The chairman of HSBC on Monday said turmoil in the credit markets could blow away some of the “froth” in the market, with “covenant-lite” loans set to be curtailed, as the bank revealed record provisions for bad debts linked to the US subprime crisis.

UK Daily View

Video: Jane Croft on US sub-prime effect on HSBC profits

Stephen Green said: “It is too early to tell if this is a temporary bout of indigestion or whether a whole new pricing structure will have established itself when people get back from their holidays . . . if it is the latter, some things that might have got done are not going to get done.”