The Hong Kong Monetary Authority (HKMA) has today (Thursday) published its Annual Report for 2000. The Report explains the HKMA's work and achievements over the past year and sets out the challenges and objectives for the year ahead.
Offering an overview of the past year, the Chief Executive of the HKMA, Mr Joseph Yam, said the Hong Kong dollar enjoyed remarkable stability during the year, with further improvements having been made to the Currency Board system under the guidance of the Sub-committee on Currency Board Operations.
Mr Yam cautioned, however, that despite the largely positive domestic performance, volatilities and uncertainties in the rest of the world inevitably had their effect on Hong Kong. "We need to do all that we can to make our domestic financial systems resilient and flexible, and, where possible, a step ahead of the needs of the market," said Mr Yam.
In this direction, both progress in reform to the international financial architecture and important advances in Hong Kong's own domestic infrastructure had been made during the year 2000, Mr Yam said.
"A milestone in the development of our domestic and regional financial infrastructure came with the completion, in the second half of 2000, of Hong Kong's US Dollar Clearing System," said Mr Yam. "Advances of this nature, including also the debt market linkages that we are progressively forging with other financial centres, help lay down the infrastructure necessary for more efficient and liquid markets."
In summing up the performance of the Exchange Fund in 2000, Mr Yam noted that "despite an extremely difficult investment environment, and general expectations of a loss, the Exchange Fund's assets rose by more than two per cent during the year."
He observed that the banking sector had performed strongly in 2000, while good progress continued to be made in the HKMA's programme of banking sector reform, including its programme of deregulation.
While noting the benefits of deregulation in providing greater choice for consumers and more efficient pricing for banks, Mr Yam said that "banks will need to handle the transition to a deregulated environment in a sensitive and transparent manner. And customers may have to be more prepared to shop around for the services that best suit their needs."
Mr Yam said the reform programme had also taken a step forward in terms of increasing safety, with an HKMA proposal to introduce a deposit insurance scheme in Hong Kong receiving broad support both in the community and within the Legislative Council.
Mr Yam noted that on-going efforts to increase transparency and accountability had continued to bear fruit during 2000, with the HKMA maintaining productive relations with legislators and expanding contacts with the District Councils. Within the community at large, the HKMA had been greatly encouraged by the warm public response to its "Money in Hong Kong" summer exhibition and other educational programmes, Mr Yam observed.
Looking ahead, Mr Yam identified two particular issues that would need to be addressed in 2001: whether a more developed framework was necessary for overseeing retail payment services, and how the HKMA should become involved in consumer issues relating to banking services.
For further enquiries, please contact:
Caitlin Wong, Manager (Press), at 2878 1687 or
Thomas Chan, Senior Manager (Press), at 2878 1480
Hong Kong Monetary Authority
3 May 2001
