HKMA publishes the report on the review of its work on banking stability

The Hong Kong Monetary Authority (HKMA) today (Thursday) published the report on the review of its work on banking stability by the independent consultant, Mr David Carse.

The HKMA initiated the review last year to make recommendations on how it can best discharge its functions in promoting the general stability and effective working of Hong Kong's banking system, taking into account recent and likely future developments and the changing nature of the risks facing the system.  In December 2007 the HKMA appointed Mr Carse to conduct the review.

The review covered a wide range of areas, including recent trends and issues in banking, the Monetary Authority's functions and powers under the Banking Ordinance, the supervisory and policy frameworks, authorization of financial institutions, and safety-net arrangements.

The report finds that the Hong Kong banking system is currently in robust condition and that the HKMA is widely respected by the Hong Kong banking sector for its professionalism and effectiveness, and viewed by outside commentators as in the top flight of regulators internationally.  No fundamental deficiencies in the regulatory and supervisory framework or processes have been identified.  The report recommends a number of measures to provide an even sounder foundation to cope with the challenges ahead.

The Chief Executive of the HKMA, Mr Joseph Yam, said, "We welcome the report, which is professional and comprehensive, and provides much food for thought.  We will study the findings and recommendations carefully, in consultation with relevant parties, to see how they can be applied to further strengthen our work in maintaining banking stability."

The HKMA will carry out a public consultation on the report until 31 October 2008.  Taking into account the views received, the HKMA will formulate a detailed policy response on how it can best carry out its functions in promoting the general stability and effective working of the banking system.

The full report (English version only) can be found at the HKMA's website (www.hkma.gov.hk). Members of the public who have comments on the report may send them to the HKMA by email (banking_review@hkma.gov.hk) or by mail to its office at 55/F, Two IFC, 8 Finance Street, Central, Hong Kong marked with reference to the Review of the HKMA's Work on Banking Stability.

Annex: Executive summary and summary of recommendations of the report

For further enquiries, please contact:
Hing-fung Wong, Manager (Press), at 2878 1802 or
Lilian Goh, Officer (Press), at 2878 8246

Hong Kong Monetary Authority
17 July 2008