FINANCIAL AND MONETARY AFFAIRS
(iii) allowing restricted licence banks to access the real time gross settlement
system (completed in December);
(iv) simplifying the three-tier authorisation system into a two-tier system in 2001;
and
(v) reviewing the existing market entry requirements for a local banking licence in
2001.
(B) Safety and soundness enhancement measures
(i) conducting a study on explicit depositor protection in 2000;
(ii) clarifying the HKMA's role as the lender of last resort to the banking system
(completed in June);
(iii) continuing to improve the financial disclosure requirements for banks in line with international best practices (updated the Best Practice Guide on Financial Disclosure by Authorised Institutions in 1999);
(iv) developing a more formal risk-based supervisory system in Hong Kong (see
above);
(v) conducting a feasibility study on a commercial credit register in 2000; and (vi) promoting high standards of corporate governance within the banking system
(the Best Practice Guide for boards of directors was revised in December). The HKMA has been considering an appropriate policy and regulatory framework to provide a sound and secure basis for the development of electronic banking in Hong Kong. A Study Group on Electronic Banking, comprising experts from both information technology and banking industries, was established in 1997 to advise the HKMA on various matters in connection with the development of electronic banking in Hong Kong. To date, the HKMA has issued four circular letters to authorised institutions, drawing their attention to the HKMA's views on various security and risk management issues regarding the provision of electronic banking services. By 1999, five banks had already launched transactional web sites in Hong Kong. A further 12 were at the planning and development stage. The HKMA intends to carry out a comprehensive review of the existing regulatory framework for electronic banking in 2000 and to strengthen its supervisory resources in this area.
In 1999, the HKMA continued to promote co-operation among central banks in the region, principally through the Executives' Meeting of East Asia and Pacific Central Banks (EMEAP), whose activities cover supervisory liaison and co- operation, development of financial markets and infrastructure, and various areas of central bank operations. The HKMA has chaired a study group (now redesignated as a Working Group) on banking supervision since its establishment in August 1996 under the direction of the EMEAP. The group comprises experts in banking supervision from EMEAP members and meets on a half-yearly basis to hold discussions in areas of mutual interest. It also conducts research and analysis on banking supervisory issues with a view to improving the understanding of such issues. in the region. The HKMA has been playing an increasingly active role in international forums of banking supervision. It participated in a working group formed by the Basle Committee to draft the Core Principles for Effective Banking Supervision and in the international supervisory initiatives regarding the Year 2000 issues.
Hong Kong, China is a member of the Financial Action Task Force (FATF), an international organisation of 26 governments and two international organisations with a mandate to encourage international efforts in the fight against money
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