2
4
Financial and Monetary Affairs
International Banking and Payment Centre
International financial institutions maintain a strong presence in Hong Kong. Of the world's top 100 banks, 71 operate in Hong Kong. At year end, 152 of the 159 licensed banks in Hong Kong were beneficially-owned by parties outside Hong Kong.
Hong Kong was the world's seventh and Asia's second largest banking centre in terms of external positions2 in the Bank for International Settlements Quarterly Review for the end of 2014 position.
The interbank money market is well established. Hong Kong dollar (HKD) wholesale deposits. are traded actively among local authorised institutions (Als), and between local and overseas Als, with an average daily turnover of $211.4 billion in 2014.
Hong Kong has a robust real time gross settlement (RTGS) interbank payment system. All banks in Hong Kong maintain settlement accounts with the Hong Kong Monetary Authority (HKMA) through the HKD RTGS system. The banks may obtain intra-day and overnight liquidity through repurchase agreements with the HKMA using Exchange Fund Bills and Notes (EFBNs) and government bonds as collateral.
US dollar (USD), euro and RMB RTGS systems also enable transactions in these currencies to be settled in real time. RTGS systems in Hong Kong are linked to enable foreign exchange transactions to be settled on a payment-versus-payment basis.
The HKMA's Central Moneymarkets Unit provides clearing, settlement and custodian services for EFBNs, government bonds and other HKD or foreign-currency private debt securities. It is linked to a number of international and regional central securities depositories to enable non- local investors to hold and settle securities lodged with the unit and local investors to hold and settle securities lodged with overseas systems. Through its integration with the RTGS systems, the unit enables securities to be settled on a delivery-versus-payment basis. The interface also enables users of the RTGS system to access intra-day and overnight liquidity through repurchase agreements.
Chart 6
External Positions of Als
HK$ Billion
20,000
15,000
16,726
15,283
13,246
10,000
12,483
11,153
5,000
0
2010
2011
2012
2013
2014
Year
Sum of liabilities to banks and non-bank customers outside Hong Kong and claims on banks and non-bank customers outside Hong Kong (such as equities, securities and capital instruments).
60