unwilling to accept unfair and discriminatory business practices. The public has already begun to voice alarm at the use of market power by suppliers in areas of special importance to the ordinary family's well-being. In some instances, such as flat sales, self-regulation of the sort envisaged by real estate developers is part of the answer. But, across the board, the Government will seek to join forces with the Consumer Council, as well as with you, the Members of the Legislative Council, to defend free markets and to give consumers the full redress against unscrupulous business practices to which they are entitled. To underline this commitment, I shall ask my Business Council to put at the top of its agenda the development of a comprehensive competition policy for Hong Kong.
FINANCIAL STABILITY
12. The Hong Kong Government does not manage the economy, nor does it set prices, fix wages or determine profits. These matters are rightly left to market forces. We have, however, traditionally accepted a special responsibility for maintaining a stable exchange rate. There is an obvious need in Hong Kong's unique circumstances to give the business com- munity and the public at large the reassurance of a stable relationship with our principal external currency. For this reason, we remain firmly com- mitted to the linked exchange rate with the US dollar, the predominant currency in our transactions with the rest of the world. The political risks of tampering with the link would be enormous. The risks to our economic stability would be equally daunting. The link must and will remain.
A Monetary Authority
13. Our monetary system must be sufficiently robust to preserve the stability of our currency both in the transition to 1997 and beyond. We have been considering how to maintain the degree of professionalism and continuity necessary to command the confidence of the people of Hong Kong and the international financial community. I have decided that the time has come to establish a Hong Kong Monetary Authority within the framework of our executive-led Government. In essence, the Authority will bring together the existing Office of the Exchange Fund and the Office of the Commissioner of Banking. These arrangements will enhance our ability to maintain monetary stability in the years to come. The Authority will be accountable to the Financial Secretary.
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