3
Financial Structure
新見市
度政
THE independence of Hong Kong's monetary system became more firmly established during the year. As a result of policies adopted by the United Kingdom Government to reduce the role of sterling as a reserve currency, Hong Kong's official holdings declined to the point where they ceased to be a dominant element in official external
reserves.
At the same time, financial institutions were becoming accustomed to operating in an environment of floating exchange rates, while the provision of banking and other financial services throughout South-east Asia by institutions established in Hong Kong continued to expand rapidly.
To reflect these trends, a Monetary Affairs Branch was created within the Govern- ment Secretariat at the end of 1976 to bring together those central banking functions performed by the government - the management of the government's external assets, its borrowings, intervention in the foreign exchange market and policy towards the development of the financial sector. The Office of the Commissioner of Banking remains a self-contained unit within the branch, exercising statutory functions in connection with banks licensed under the Banking Ordinance and other financial institutions registered under the Deposit-Taking Companies Ordinance.
How Hong Kong Works
With the ultimate authority resting with the Legislative Council, Hong Kong has almost complete autonomy in financial affairs and draws up its own estimates of revenue and expenditure, which are submitted to the Legislative Council each year. However, approval by the Secretary of State for Foreign and Commonwealth Affairs is required before decisions are made on certain major matters, such as currency and banking.
Hong Kong is financially self-supporting and the government's accounts showed a surplus of $902 million for the 1976-7 financial year.
The Urban Council, operating through the Urban Services Department, also is free to draw up its own budget and to determine its own priorities of expenditure within its various spheres of activity. These are financed mainly from the yield from the Urban Council rate and partly from other sources of revenue related - largely through fees and charges to the services and facilities the council provides.
The Housing Authority is responsible for the provision and management of public housing and its executive arm is the Housing Department. Under the Housing Ordin- ance, the authority is required to ensure that its income - derived mainly from rent