Memorandum of Understanding between the HKMA and the CBRC

The Hong Kong Monetary Authority (HKMA) and the China Banking Regulatory Commission (CBRC) today (25 August) signed a Memorandum of Understanding (MOU). The MOU provides for the sharing of supervisory information and co-operation in the area of banking supervision.

Under the MOU, the HKMA and the CBRC agree to work together

• to ensure that the operations of the cross-border branches, agencies, representative offices and subsidiaries of banking organisations under their respective jurisdiction are prudently conducted
• to ensure that the head offices and parent banking organisations exercise adequate and effective control over the operations of their cross-border branches and subsidiaries
• to ensure that their respective ongoing supervision of banking organisations effectively covers cross-border banking establishments on a consolidated basis and assist each other in performing such function.

"The signing of the MOU between the HKMA and the CBRC makes an important milestone in co-operation between the two organisations," said Mr Joseph Yam, Chief Executive of the HKMA. "I am confident that with the implementation of the MOU the two regulatory authorities will be able to work together to enhance cross-border supervision of financial institutions in Hong Kong and the Mainland," said Mr Yam.

"The existing ties of Hong Kong and the Mainland banking systems and the common interests in upholding financial stability and prudential principles reinforce the need for strengthening co-operation between the two supervisory authorities," said Mr Liu Ming-kang, Chairman of the CBRC. "This is now further reinforced and formalised in the MOU," added Mr Liu.

Under the MOU, the two supervisory authorities agree

• to share supervisory information relating to banking organisations incorporated in their respective jurisdictions that maintain operations in both the Mainland and Hong Kong
• to hold regular meetings twice a year to discuss general supervisory developments as well as issues concerning banking organisations, which maintain operations in both the Mainland and Hong Kong
• to consult each other prior to acting on an application from a banking organisation incorporated in the Mainland or Hong Kong for the establishment of branches or subsidiaries in the jurisdiction of the other authority, or for the cross-border qualifying holding of shares of another banking organisation incorporated in the jurisdiction of the other authority
• to notify each other of plans to conduct an on-site examination of any branch or subsidiary of a banking organization in the jurisdiction of the other authority.

A photo showing the signing of the MOU is available on the HKMA website at http://www.hkma.gov.hk

For further enquiries, please contact:

Jasmin Fung, Manager (Press), at 2878 8246 or
Thomas Chan, Senior Manager (Press), at 2878 1480

Hong Kong Monetary Authority
25 August 2003