Global banking giant HSBC plc is sounding a decidedly cautious note about the global economy’s prospects.

The firm says that it hasn’t yet been hit too hard. “The slowdown in the world economy and its impact on corporate borrowers has not yet had a significant impact on our levels of provisioning for bad and doubtful debts,” said Sir John Bond, group chairman, in a statement announcing the bank’s latest results. “Low interest rates, low inflation and resilient consumer spending in the developed markets have offset the effects of lower levels of corporate investment and weaker profitability.”

But Bond conceded, “The outlook for the financial services industry is unclear. There is evidence of increasingly fragile economic conditions in certain emerging markets. The performance of the U.S. economy remains pivotal and the Federal Reserve indicated last month that there are as yet few signs of it rebounding.”

HSBC appears to be worried about economic stability in emerging markets, notably Argentina. The bank is seeing some large hedge funds making big bets on the Argentine situation. Keith Whitson, HSBC’s group chief executive, said, “If the rumours are to be believed, there are those building up big speculative positions. It is not at all helpful.” He called the situation “very delicately poised”.

“While the economic environment will remain challenging, we have positioned our business conservatively,” said Bond. The strength of our liquidity, our capital base and our loan loss reserves enable us to respond robustly to any events which may arise.”

HSBC also reiterated that it is not about to merge with its online partner Merrill Lynch, despite persistent rumours. It suggested that it will slow investment in the online venture because of weak markets.