HONG KONG MONETARY AUTHORITY Annual Report 1996
HONG KONG MONETARY AUTHORITY
MARKET INFRASTRUCTURE
With a view to enhancing the competitiveness of Hong Kong as an international financial centre, the HKMA has embarked on a number of initiatives to promote the development of financial markets and improve the robustness of the financial infrastructure in Hong Kong. Major milestones achieved include the Exchange Fund Bills & Notes Programme, the launch of the Real Time Gross Settlement system for interbank payments and the establishment of the Mortgage Corporation.
OBJECTIVES
An efficient and robust interbank payment system provides the foundation for sound and competitive financial markets. In order to enhance the robustness of the interbank payment system in Hong Kong, the HKMA together with the Hong Kong Association of Banks, launched a new Real Time Gross Settlement (RTGS) system in December 1996. The HKMA also established a mortgage corporation to promote monetary and banking stability as well as the growth of the local debt market.
Fostering the growth of the local debt market has been one of HKMA's key objectives. The establishment of the Exchange Fund Bills and Notes Programme and the Central Moneymarkets Unit (CMU), which provides a computer book entry clearing system for the Bills, in 1990 were the first stage in this process. Following the setting up of the HKMA in 1993, further measures were undertaken: the extension of the benchmark yield curve, the broadening of the CMU service to cover private sector Hong Kong dollar and foreign currency debt securities, the linking of CMU with Euroclear and Cedel in 1994, and the MTRC Note Issuance Programme (Table 1).
| Table 1: MEASURES TO DEVELOP THE LOCAL DEBT MARKET |
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| Exchange Fund Bills & Notes Programme (Benchmark yield curve extended from 3-month in 1990 to 10-year in 1996) |
1990-96 |
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| Setting up of Central Moneymarkets Unit (CMU) (A computerised central clearing and settlement system was established for Exchange Fund papers in 1990. Clearing and settlement of private sector debt securities began in 1994 and was extended to cover foreign currency debt issues in 1996.) |
1990 |
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| International linkage (CMU was linked with Euroclear and Cedel - the first such link up for Asia) |
1994 |
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| MTRC debt issue (The HKMA acted as arranger for MTRC's $10 billion Note Issuance Programme) |
1995 |
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