the banking sector,
the
Government passed urgent
legislation to take over the Hang Lung Bank, a local bank
with 28 branches, which, after a year of mounting
problems, found itself unable to meet its obligations
without government support. During the quarter, one deposit-taking company licence was granted, bringing the number of licensed deposit-taking companies to 30.
By the
end of September, all of them were in operation. Over the
same period, the number of registered deposit-taking
companies fell by 7 to 319: four took up their new
licensed status, five had their registrations revoked by
the Commissioner of Deposit-taking Companies (of which
four were at their own request), while two new ones were
registered.
Money supply
3.3
(2)
The money supply figures continued to be
(3) distorted by the presence of swap deposits and by the
/ valuation
(2) The Definitions of the Money Supply are:
(3)
Ml
-
Total
M2 Total
-
M3 Total
Notes and coins with the public, plus customers' demand deposits with licensed banks.
Ml plus customers' savings and time deposits with licensed banks, plus negotiable certificates of deposit issued by licensed banks and held outside the monetary sector.
M2 plus customers' deposits with licensed and registered deposit-taking companies plus negotiable certificates of deposit issued by deposit-taking companies and held outside the monetary sector.
HK$M1, HK$M2 and HK$M3 are the Hong Kong dollar components of these definitions.
Swap deposits involve customers buying spot foreign currency and placing it on deposit with financial institutions, but at the same time entering into a contract to sell forward such foreign currency back to the financial institutions on the maturity of the deposits. In this sense, the local currency characteristics of these deposits are concealed.
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