10
WEDNESDAY, JULY 13, 1994
THESE
IMPLEMENTATION OF
RECOMMENDATIONS IS SUBJECT FINDINGS OF HKAB'S TECHNICAL FEASIBILITY STUDY, HKMA WILL BE VERY CLOSELY WITH THE HKAB ON THAT STUDY.
TO WORKING
THE
THE EXISTING PAYMENT AND SETTLEMENTS ARRANGEMENTS FORMALISED IN 1981 AND ARE RUN BY THE CLEARING HOUSE OF THE HKAB THE HONG KONG BANK AS THE MANAGEMENT BANK.
WERE WITH
WHILE THE PRESENT SYSTEM MEETS ADEQUATELY HONG KONG'S NEEDS, IT MR HAS FALLEN SHORT OF EMERGING INTERNATIONAL STANDARDS, ACCORDING TO YAM.
CHEQUES
THE SYSTEM, FOR EXAMPLE, IS PREDOMINANTLY PAPER BASED. ACCOUNT FOR MORE THAN THREE-QUARTERS OF TRAFFIC VOLUME AND 40 PER CENT FOR BY VALUE, COMPARED WITH 54 PER CENT AND 10 PER CENT RESPECTIVELY THE UNITED KINGDOM.
FURTHERMORE, OF THE MAJOR FINANCIAL CENTRES, ONLY HONG KONG AND OF SAME-DAY CANADA HAD
INSTEAD NEXT DAY FINALITY OF SETTLEMENT,
WAS SETTLEMENT, WHICH HAD BEEN THE INTERNATIONAL NORM, AND EVEN THAT INCREASINGLY CONSIDERED TO BE INADEQUATE, MR YAM ADDED.
THE ADOPTION OF THE COMMITTEE'S RECOMMENDATIONS WOULD AND ELIMINATE AS FAR AS POSSIBLE PAYMENT SYSTEM RISKS.
BOOKS
MINIMISE
OF
HKMA,
FOR
OF SETTLING
LARGE PAYMENTS ACROSS THE EXAMPLE, WOULD ENSURE FINALITY OF SETTLEMENTS BECAUSE "ONLY HKMA IS IN
PROVIDE DEFAULT FREE
FOR MONEY
FINAL, UNCONDITIONAL SETTLEMENT OF HONG
KONG
NAMELY,
DOLLAR
TO A POSITION IRREVOCABLE AND
PAYMENTS," SAID MR YAM.
MOVING TO RTGS ALSO WOULD HELP CONTROL HERSTATT ARISES FROM FOREIGN EXCHANGE TRANSACTIONS IN WHICH ONE PAYS HONG
12 DOLLARS TODAY AND MAY NOT RECEIVE U.S. DOLLAR VALUE UNTIL LATER NEW YORK TIME.
RISK.
THIS
KONG
HOURS
THIS
LAG IN THE EXCHANGE OF VALUE COULD RESULT TIMK LOSSES IF THE COUNTER-PARTY FAILS.
IN
HUGE
THE
SUCH A RISK WOULD BE REMOVED PROVIDED THAT HONG KONG IMPLEMENTS
ΤΟ SIMILAR AND THAT THE SYSTEM IS LINKED RTGS SYSTEM SYSTEMS ABROAD.
PAYMENT
UNDER THOSE CIRCUMSTANCES, ONE WHO PAYS HONG KONG DOLLARS RECEIVE SIMULTANEOUSLY U.S. DOLLARS WITH FINALITY.
WILL
"THE PAYMENT SYSTEMS OF MANY ESTABLISHED AND EMERGING FINANCIAL PERHAPS CENTRES ARE ALREADY ON RTGS OR ARE MOVING QUICKLY TOWARDS IT,
LINK UP OF PREPARING THEMSELVES TO THE POSSIBILITY OF THIS GLOBAL PAYMENT SYSTEMS IN 1997," MR YAM SAID.
"IF WE DO
LEFT
AND BE A PUT OUT
NOT, HOW THEN CAN WE CONTINUE TO DEVELOP RECOGNISED AS AN INTERNATIONAL FINANCIAL
SATISFY CENTRE AND REQUIREMENT LAID DOWN IN THE JOINT DECLARATION AND THE BASIC LAW? SIMPLY, EITHER YOU'RE PLUGGED IN TO THE NETWORK OR YOU'RE ALONE.
/11