3
MONDAY, MAY 11, 1992
HE SAID: "THE CLOSURE OF BCCHK SHOULD NOT DETRACT FROM THE SUPERVISORY FRAMEWORK IN HONG KONG WELL WITH THOSE IN OTHER MAJOR FINANCIAL CENTRES".
BE ALLOWED ΤΟ WHICH COMPARES
HE ADDED THAT THE ORIGINS OF THE PROBLEMS OF THE BCC GROUP LAY OUTSIDE HONG KONG.
THE COMMISSIONER OF BANKING HAS TAKEN TO STRENGTHEN THE SUPERVISORY FRAMEWORK.
FURTHER STEPS
NEW LEGISLATION WAS ENACTED IN 1991 WHICH STRENGTHENS THE PROVISIONS OF THE BANKING ORDINANCE PARTICULARLY RELATING TO CHANGES OF CONTROL OF AUTHORISED INSTITUTIONS AND то LIMITATIONS ON CREDIT EXPOSURES.
FURTHER LEGISLATION IS PROPOSED WHICH WILL PERMIT EXTERNAL AUDITORS TO PLAY AN INCREASED ROLE IN THE REVIEW OF AUTHORISED INSTITUTIONS' INTERNAL CONTROLS.
MR CARSE SAID THE BASLE COMMITTEE ON BANKING SUPERVISION WAS EXAMINING THE IMPLICATIONS OF THE BOC INCIDENT FOR THE SUPERVISION OF INTERNATIONAL BANKS.
HE INDICATED THAT HIS OFFICE WOULD TAKE ACCOUNT OF ANY RECOMMENDATIONS WHICH THE BASLE COMMITTEE MADE.
THE CAPITAL ADEQUACY OF THE BANKING SYSTEM AS A WHOLE REMAINED WELL ABOVE THE LEVELS REQUIRED UNDER THE BASLE ACCORD.
"ALL LOCALLY INCORPORATED INSTITUTIONS (EXCEPT BCCHK) MINIMUM RATIOS SET FOR THEM DURING 1991," MR CARSE NOTED.
THE REPORT NOTED THAT THE NUMBER OF
MET THE
AUTHORISED INSTITUTIONS
DROPPED IN 1991 FROM 405 TO 375.
MR CARSE SAID HE WAS CONFIDENT ABOUT HONG KONG'S CONTINUING ROLE AS AN INTERNATIONAL FINANCIAL CENTRE.
"MOST OF THE REVOCATIONS WERE BY DEPOSIT-TAKING COMPANIES, REFLECTING THE CONTINUING RATIONALISATION AND CONSOLIDATION WITHIN THAT SECTOR, HE NOTED.
HE ADDED THAT THERE WAS A CONTINUING FLOW OF FOREIGN BANKS WHO WISHED TO COME TO HONG KONG.
THE RAPID GROWTH OF LENDING FOR RESIDENTIAL SUPERVISORY ATTENTION IN 1991.
HOUSING ATTRACTED
MR CARSE EXPLAINED THAT IT WAS AGAINST THE BACKGROUND OF A HIGHLY ACTIVE RESIDENTIAL HOUSING MARKET THAT HIS OFFICE WROTE ΤΟ BANKS IN MAY, AND AGAIN IN NOVEMBER, LAST YEAR TO REMIND THEM OF THE NEED TO EXERCISE PRUDENCE WHEN LENDING IN A BOUYANT MARKET.
HE COMMENDED THE BANKING INDUSTRY FOR TAKING THE INITIATIVE ITSELF IN NOVEMBER TO REDUCE THE LOAN TO VALUATION RATIO FOR NEW MORTGAGE LOANS TO 70%.
/HE WELCOMED