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21.
The banking sector saw solid gains. Total deposits and loans both rose by around 14 per cent. The Hong Kong dollar debt market increased by 29 per cent over the year to reach $197 billion, an indication of its impressive liquidity.
Moreover, he pointed out that last year was also important because of the further reassurance it offered of the resilience of our financial institutions which he, in particular, referred to the linked exchange rate.
He cited an example that during the fall-out from the Mexican currency crisis in early 1995 which had also affected Hong Kong together with a number of other Asian currencies, the Hong Kong Monetary Authority handled the pressures decisively and demonstrated the effectiveness of its contingency measures to defend the linked rate.
He said during the year, the Monetary Authority took further steps to reinforce the stability of the territory's financial institutions and had strengthened ties with other regional central banks.
He disclosed that arrangements were now in place to exchange information with them on currency speculation, as well as for formal repurchase agreements to increase the liquidity of each parties' official reserves.
"The lessons of last year should be very clear. Our commitment to the linked exchange rate at its current parity is absolute.
"We will not allow speculators to undermine the stability of our financial system. We have both the expertise and the resources that we need to defeat them," he said.
On the Government's commitment to openness and transparency in the operations of the Exchange Fund, Mr Tsang an example as noting that last year, the Government increased the frequency with which we publish information about the Fund and was now doing so quarterly.
He was pleased to report that the underlying foreign exchange assets in the Exchange Fund rose again in the last quarter of 1995.
He pointed out that the figures of the Fund, now standing at US$57.2 billion and 12 per cent higher than the corresponding total for the year before, were impressive indeed.
End