(3) Financ. il.
12
Monetary Affairs Branch
36
Before learing the financial section of this speech I would
like to refer to the series of administrative reforms connected with
the creation of the Monetary Affairs Branch of the Government Secretariat
under the direction of a Secretary for Monetary Affairs who is responsible
to the Financial Secretary. They are important, though they have received
little attention. The creation of the Branch followed the transfer to
the Secretariat from the Treasury in 1975 of the responsibility for the
management of the Government's financial assets, and the transfer to the
Exchange Fund of the Government's foreign currency assets and all of the
assets of the Coinage Security Fund.
37.
The Monetary Affairs Branch has two main functions. One is
for responsibility for all Exchange Fund matters. The other is concerned
with monetary and banking policy, and also exchange problems. The office
of the Commissioner of Banking will remain a separate self-contained unit
within the Monetary Affairs Branch, with statutory responsibility for the
prudential supervision of financial institutions.
38.
Two other developments are planned. The first is the transfer
to the Monetary afairs Branch of Treasury functions connected with the
supply of notes and coins to the banking system. The other will result
in the Exchange Fund taking over the Hong Kong dollar assets of the
General Account, other than those required for day to day business.
The Exchange Fund will then effectively become banker to the Government.
When these moves have been completed all of what may be described as
the central banking functions presently carried out by the Government,
and also the control and management of all the Government's financial
assets, will have been located in the Monetary Affairs Branch under the
direction of the Secretary for honetary Affairs.
/39. I am