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Financial and Monetary Affairs
Another function related to the fund is currency issuance. Bank notes in denominations of $20, $50, $100, $500 and $1,000 are issued by three note-issuing banks: Bank of China (Hong Kong) Limited, the Hongkong and Shanghai Banking Corporation Limited and Standard Chartered Bank (Hong Kong) Limited. These banks may issue currency notes only by surrendering non- interest-bearing USD backing at a fixed exchange rate of HK$7.80 to US$1.
Through the HKMA, the government issues $10 currency notes and coins in denominations of $10, $5, $2, $1, 50 cents, 20 cents and 10 cents. The value of all notes and coins in circulation at the end of 2020 was $573 billion.
The following sections set out the development of various sectors of financial services in 2020.
Banking and Payment System
Banking System
Hong Kong has a robust banking sector, with healthy asset quality and strong liquidity and capital positions. The city was the world's sixth and Asia's second largest banking centre in terms of external positions, according to the Bank for International Settlements Quarterly Review for December 2020.
International financial institutions maintain a strong presence in Hong Kong. At the year end, 152 of the 161 licensed banks in Hong Kong were beneficially owned by parties outside Hong Kong, and 77 of the world's top 100 banks operated in the city.
Hong Kong maintains three tiers of deposit-taking institutions: licensed banks (LBs), restricted licence banks (RLBs) and deposit-taking companies (DTCs). They are known collectively as authorised institutions (Als) under the Banking Ordinance and are supervised by the HKMA.
Chart 1
External Positions of Als
25,000
23,822
20,000
22,439
21,960
20,888
HK$ Billion
18,779
15,000
10,000
5,000
0
2016
2017
2018
2019
2020
Year
4
5
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.
Only LBS may conduct full banking services, including the provision of current and savings accounts and acceptance of deposits of any size and maturity. RLBS may take deposits of any maturity of $500,000 or above. DTCs may take deposits of $100,000 or above with an original maturity of at least three months.
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