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securities, issue of certificates of deposit, and trust fund management. The growing and more diversified economic links between Hong Kong and China have added a new dimension to the BOC Group's business portfolio.
50.
In line with these changes, all member banks of the BOC Group have strengthened their capitalization in recent years. The recent take-over of the Ka-wah Bank by CITIC and of the Union Bank by China Merchants Steam Navigation Company (CMSNC) have in effect increased the number of PRC-controlled banks in Hong Kong to 15, though these two additions seem likely to be much more independent of the BOC than the original 13. seems that many PRC organisations in Hong Kong intend to set up their own financial vehicles, in form of a local bank or a local deposit-taking company under their control, so as to circumvent the controls imposed on them by the PBOC and other state organisations in China.
Moreover,
51.
It is clear that the BOC Group will continue to be an influential component in Hong Kong's financial sector. While the BOC Group has so far posed no problem to banking supervision in Hong Kong, its position in the future will depend on the changes in the nature of its business and the type of public image it intends to maintain in the process of promoting its services. other hand, the acquisition or setting up of financial intermediaries in Hong Kong by PRC organisations over which the BOC Group has no direct control may create problems in terms of prudential supervision.
it
On the
In the light
of these developments, closer contacts between the banking supervisory bodies in Hong Kong and in China are deemed desirable, and the Commissioner of Banking and Deposit-taking Companies is working in this direction.
CONFIDENTIAL #