The Hong Kong Monetary Authority (HKMA) has today (Tuesday) published its Annual Report for 2001. The Report explains the HKMA's work and achievements over the past year and set out the challenges and objectives for the year ahead.
In his statement to the Annual Report and overview of the year 2001, Mr Joseph Yam, the Chief Executive of the HKMA, observes that, despite a very difficult year in 2001, Hong Kong's economic fundamentals remain strong, and its inherent qualities as a free and open city are as vital as ever. "Our financial and banking systems have continued to be robust, despite prolonged economic problems and the dramatic fall in asset prices," Mr Yam notes.
Mr Yam draws particular attention in the Report to progress made in developing financial infrastructure, and particularly to the first full year of operation of our new US dollar clearing system, which saw a steady increase in business - much of it from outside Hong Kong. "The advanced state of Hong Kong's financial infrastructure is one of Hong Kong's greatest competitive advantages as an international financial centre," Mr Yam observes. "The objective should be to ensure that this financial infrastructure not only meets present needs but also anticipates future market opportunities. To achieve this, Hong Kong's financial infrastructure has to have the capacity, efficiency, accessibility, diversity and flexibility to prepare for the emerging opportunities in the region, and to be able to catch these opportunities before they pass us by," Mr Yam adds.
Mr Yam notes that the banking sector maintained high levels of liquidity and capital strength during 2001, saw continued improvement in overall asset quality and recorded only a moderate decline in profitability. "Clearly, Hong Kong's banking industry remains safe and resilient," Mr Yam observes.
Referring to the debate on the peg in 2001, Mr Yam notes that the Linked Exchange Rate System provides a predictable and conducive business environment for an economy which imports practically everything that it consumes, processes or re-exports. "For a financial centre with heavy international capital flows but no capital controls, linking our currency to a strong international currency provides stability and strength," Mr Yam remarks. "Our Exchange Fund, which, against expectations, showed a modest investment profit in 2001, provides ample foreign exchange backing to support the Link," he adds.
The Annual Report assesses the economic and banking environment in Hong Kong in 2001 and provides an overview of HKMA achievements in maintaining monetary stability and banking stability, and promoting market infrastructure in Hong Kong. It also provides an account of the HKMA's work in promoting Hong Kong as an international financial centre and reinforcing transparency and accessibility by the community. In the Report, the HKMA publishes the audited accounts of the Exchange Fund for 2001.
To facilitate wider distribution to the public, a Summary Report is available along with the HKMA Annual Report for 2001. It carries the Chief Executive's Statement in full and presents a summary of the work and achievements of the HKMA in 2001. The full text of the HKMA Annual Report is also available, in interactive and bilingual form, on the HKMA's website at http://www.info.gov.hk/hkma/ar2001/report/english/index.htm.
The HKMA Annual Report for 2001 is available for sale at the Government Publications Centre and from the HKMA at HK$110 per copy.
For further enquiries, please contact:
Jasmin Fung, Manager (Press), at 2878 8246 or
Sylvia Yip, Manager (Press), at 2878 1687
Hong Kong Monetary Authority
30 April 2002
