Financial and Monetary Affairs 85
attended. The event established an important milestone in financial co-operation between the two places.
In December, Premier Wen Jiabao announced measures to support Hong Kong's economic growth as well as the Central People's Government's support of Guangdong-Hong Kong financial co-operation. A new task force on financial co-operation will be set up under the Guangdong-Hong Kong Co-operation Joint Conference in 2009 to draw up proposals.
Enhancing Hong Kong's Competitiveness as an International Financial Centre
The Government is committed to strengthening Hong Kong's competitiveness as an international financial centre and the premier capital formation centre for the Mainland through enhancing its regulatory regime, promoting corporate governance, upgrading financial infrastructure and fostering development of the bond market.
Work on Hong Kong's regulatory framework continued in 2008 based on international experience and standards to ensure sound business standards and confidence in the market. Major initiatives were pursued to improve Hong Kong's competitiveness as an international financial centre.
Optimising the Supervisory Framework
As pledged by the Chief Executive in the 2008-09 Policy Address, the Government will review and strengthen the supervisory framework for authorised institutions in Hong Kong to further strengthen the resilience of Hong Kong's banking system and to reinforce Hong Kong's role as an international centre, following recommendations from the Financial Stability Forum, the Basel Committee on Banking Supervision and other international organisations charged with analysing the causes and effects of the subprime and credit market crises. The Government will also conduct a review on the Deposit Protection Scheme to provide depositors. with better protection.
An effective regulatory regime is a pre-requisite to maintaining investor confidence and Hong Kong's standing as an international financial centre. The collapse of Lehman Brothers in September triggered complaints about sales of structured investment products by financial intermediaries to retail investors. The HKMA and the SFC each prepared a report on its observations, lessons learnt and issues identified during the process of investigating these complaints. The government and the regulators will implement in phases the various recommendations made in the reports to further improve the regulatory framework and enhance investor protection, particularly when securities business is conducted by banks.
Developing Islamic Finance
The Government is also pressing ahead creating a platform for developing Islamic finance. In 2008, the Chief Executive and the Secretary for Financial Services and the Treasury visited the Middle East to promote Hong Kong's strengths to develop Islamic finance. The Government is also reviewing its tax regime to provide