Key Information

inSight
Speeches
Speeches by Speaker
Norman T.L. Chan
Peter Pang
Eddie Yue
Arthur Yuen
Raymond Li
Edmond Lau
Esmond Lee
Meena Datwani
Vincent W.S. Lee
James Lau
Joseph Yam
Y K Choi
William Ryback
David Carse
Tony Latter
Andrew Sheng
Hans Genberg
Simon Topping
Michael Taylor
The Honourable Donald Tsang
Chen Yuan
Dai Xianglong
Don Brash
Jaime Caruana
Andrew Crockett
Mario Draghi
David Eldon
Stanley Fischer
Timothy F. Geithner
Stephen Grenville
Kenneth G. Lay
William McDonough
Ernest Patrikis
Glenn Stevens
Jean-Claude Trichet
Tarisa Watanagase
Zeti Akhtar Aziz
Press Releases
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
Press Releases by Category
Bogus Voice Message Phone Calls
Banking in Hong Kong
Fraudulent Websites, E-mails and Telephone System, and other fraud cases
Granting of Banking Licences
Exchange Fund
Table of Multiples of Notes and Payments for Allotted Amount under non-competitive tender
Table of Multiples of Notes and Payments of Application Amount under non-competitive tender
Tender of Exchange Fund Bills and Notes
Tender Results of Exchange Fund Bills and Notes
Tentative Issuance Schedule for Exchange Fund Bills and Notes
Appointments and Departures
HKMA Pay Review
HKMA Publications
Speeches
The Hong Kong Mortgage Corporation
Hong Kong Note Printing Limited
Hong Kong Institute for Monetary Research
Exchange Fund Investment Limited
Others
Hong Kong Financial Infrastructure
International Relations
Investment Products Related to Lehman Brothers
Monetary Policy
Notes and Coins
Renminbi business
Credit Card Lending Survey
Monetary Statistics
Residential Mortgage Survey
Year 2000
Others
Guidelines and Circulars
Guidelines
Circulars
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
359.3404

Speeches

Statement by Norman T.L. Chan, Chief Executive of the Hong Kong Monetary Authority to the media on 22 September 2011


(Translation)

The Federal Open Market Committee of the US Federal Reserve has just finished a two-day meeting.  We note the Federal Reserve has decided to sell US$400 billion of short-term Treasury debts in exchange for longer-term Treasury debts by end-June 2012, with an aim of lowering longer-term interest rates.  To support conditions in mortgage market, the Federal Reserve has also decided to reinvest principal payments from its holdings of agency debt and mortgage-backed securities in agency mortgage-backed securities. The Federal Reserve also sees significant downside risks to the economic outlook.

2. By further lowering the US dollar long-term interest rates through these measures, the Federal Reserve aims to reduce the cost of credit so as to stimulate economic growth and employment.  However, due to the very subdued US housing market and the high indebtedness of US households, the effectiveness of these new measures in stimulating the US real economy remains to be seen.  In terms of the implications on local interest rates, as Hong Kong Interbank Offer Rates (HIBORs) are already extremely low at levels near zero, the new measures of the Federal Reserve will not have any substantive impact on HIBORs.  However, there has been an upward trend for the deposit rates and lending rates in Hong Kong since the first quarter because of changes in the supply of and demand for funds within Hong Kong’s banking sector.  I believe this trend will continue, and will not be affected by the new measures introduced by the US Federal Reserve.

3. At present, Hong Kong is facing a very unusual macro environment.  The persistently low interest rates in the advanced economies have led to massive capital flows into emerging market economies in the past two years, fuelling over-heating pressures and heightening the risks of inflation and asset price bubble.  As economic growth in the US has decelerated sharply, the Federal Reserve is anticipating the maintenance of an accommodative monetary policy for a longer period of time.  Therefore, we must not loosen our guard against the risk of Hong Kong’s property market heating up again.  We stand ready to introduce further measures as needed to maintain banking stability in Hong Kong.  But at the same time, Hong Kong also needs to prepare for possible worsening of the European sovereign debt problems and the consequential shocks on the global financial system and the real economy.

4. In such an uncertain external environment, we have to stay vigilant. The HKMA has introduced a series of countercyclical supervisory measures requiring banks to continue to strengthen risk management.  We have also repeatedly reminded the public to be careful and avoid over-stretching themselves financially.  The purpose of all these is to strengthen the resilience of Hong Kong’s banking and financial systems, so that they can cope with possible turbulences and shocks in the future.

Last revision date: 22 September 2011
ABOUT THE HKMA
The HKMA
Tender Invitations
Careers@HKMA
Legislative Council Issues
Links
The HKMA Information Centre
KEY FUNCTIONS
Monetary Stability
Banking Stability
International Financial Centre
Exchange Fund
PUBLICATIONS & RESEARCH
Annual Report
Half-Yearly Monetary & Financial Stability Report
Quarterly Bulletin
HKMA Background Briefs
Reference Materials
Research
MARKET DATA & STATISTICS
CMU Bond Price Bulletin
Economic & Financial Data for Hong Kong
Monthly Statistical Bulletin
Monetary Statistics
KEY INFORMATION
Press Releases
Speeches
Guidelines & Circulars
Forthcoming Events
inSight
OTHER INFORMATION
Account Opening
Consumer Corner
Consumer Education Programme
Complaints about Banks
Complaints about SVF Licensees
Internet Banking
Fraudulent Bank Websites, Phishing E-mails and Similar Scams
Be Careful of Bogus Phone Calls and SMS Messages
Authenticate the Callers and Bank Hotline Numbers
Register of AIs & LROs
Register of Securities Staff of AIs
Register of SVF Licensees
Investment Products Related to Lehman Brothers
Photo Gallery