FINANCIAL STRUCTURE
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assets are concerned. This does not mean, however, that the value of the Hong Kong dollar could necessarily be maintained if such an event was followed by substantial devaluations by Hong Kong's trade competitors to the detriment of her trading position.
Following a meeting of the Group of Ten in Washington towards the end of December, it was announced that the US dollar would be devalued by 7.89 per cent. This was accompanied by a series of adjustments of other major world currencies. However, both sterling and the Hong Kong dollar maintained their gold parity. In effect, this means that the rate of exchange between the Hong Kong dollar and sterling remains unchanged at $14.55 to £1, while the Hong Kong dollar has been revalued against the US dollar by 8.57 per cent. The new official rate is now HK$5.58 to US$1 as against the old rate of HK$6.06 to US$1.
BANKING
Bank deposits in the Colony increased again during 1971 to reach a new record figure of $18,785 million at the end of the year, rep- resenting a rise of 25.6 per cent over the previous year-end figure.
Loans and advances increased to $11,836 million and, as a per- centage of bank deposits, amounted to 63 per cent at the end of the year, compared with 64.7 per cent at the end of 1970.
At the end of 1971 there were 70 incorporated banks in the Colony with a total of 431 banking offices, an increase of 32 offices during the year. In addition, eight representative offices of foreign banks were given approval to open, making a total of 40.
Fifty-one of the licensed banks are Authorised Banks for the operation of Exchange Control in the Colony. Together with the unauthorised banks, they have branches and correspondents through- out the world and offer a comprehensive banking service of the highest order.
Monthly bank clearings during the year averaged $12,874 million. The tables at Appendix 19 illustrate the growth of the banking system over the past 16 years.
STOCK EXCHANGES
At the end of 1971 there were six stock exchanges incorporated in the Colony under the provisions of the Companies Ordinance, but only three of these were engaged in active trading. During the year the total stock exchange turnover was valued at $14,793.39 million, an increase of 150 per cent over the previous year.