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62.4748

Banking Stability

The HKMA has a general objective to promote the safety and stability of the banking system. Achieving this objective is contingent upon the financial system being resilient and capable of providing the critical financial functions the Hong Kong economy needs.

Banks can affect the stability of the system through the way they carry out their business and in extremis, by failing in a disorderly manner. The HKMA, as a supervision authority, plays a key role in safeguarding financial stability by ensuring banks are resilient to shocks, are able to recover their position in response to crisis and ultimately helping to prevent failure. It is responsible for the prudential regulation and supervision of banking business and the business of taking deposits in Hong Kong. It is also responsible for the authorization of licensed banks, restricted licence banks and deposit-taking companies in Hong Kong, which are collectively known as authorized institutions.

However, the HKMA cannot ensure, nor is the Hong Kong prudential regulatory framework designed, a zero risk financial system. Instead, the HKMA, as a resolution authority, seeks to ensure that any bank failure is orderly such that continuity in critical financial functions provided by banks to their customers can be maintained.

The activities of the HKMA during the year on the maintenance of banking stability can be found in the Banking Stability chapter of the HKMA Annual Report.

Last revision date: 26 September 2017
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