The 1996 Annual Report of the Hong Kong Monetary Authority
(HKMA) is published and tabled in Legco today (30 April).
The theme of this year's Annual Report is "Achievements and
Challenges". The Report reviews the achievements of the HKMA since
its establishment in 1993 in four main areas of work, namely, the
maintenance of monetary stability, the promotion of banking
stability, the building of the financial market infrastructure and
the development of Hong Kong as an international financial centre.
The Report also sets out the challenges for the HKMA in the years
ahead.
The Hong Kong dollar has continued to show remarkable stability
during 1996, remaining on the strong side of the linked rate of
7.80 to US$1. The Exchange Fund, which is a major component in the
defence of the Hong Kong dollar, has continued to pose healthy
growth.
Major achievements have also been made in the development of the
financial market infrastructure. These include the successful
launching of the Real Time Gross Settlement system in late 1996. On
the international front, Hong Kong joined the Bank for
International Settlements and the International Monetary Fund's New
Arrangements to Borrow. Major efforts were also undertaken in 1996
to explain to the international financial community Hong Kong's
monetary arrangements through 1997.
The Hong Kong banking sector remained well capitalised, highly
liquid and profitable during 1996. Continued progress was made in
developing the supervisory framework. A specialist team on
derivatives was established and industry guidelines on risk
management for derivatives and other traded instruments were
issued. A reporting framework for market risk exposures of
authorised institutions was introduced. Further steps were also
taken to improve the transparency of the financial position of
authorised institutions and Hong Kong now leads the way in Asia in
terms of financial disclosure. A Code of Banking Practice was
drafted and amendments were introduced to the Banking Ordinance for
the regulation of multi-purpose stored value cards.
Mr Joseph Yam, Chief Executive of the HKMA, said: "We have taken
the opportunity of this special year of transition to take stock of
the work carried out by the HKMA. We cannot be complacent and we
shall endeavour to strengthen our efforts to maintain monetary and
financial stability and to keep Hong Kong as a premier
international financial centre."
To further widen the readership of the Report and to promote
understanding of the work of the HKMA, the 1996 Annual Report will
be available on the Internet.
Hong Kong Monetary Authority
30 April 1997
