XN000022-1984-12-14 — Page 8

FRIDAY, DECEMBER 14, 1984

IN THE PAST DECADE, THE FINANCIAL SECTOR IN HONG KONG HAS OUTGROWN THE REST OF THE ECONOMY AND BY THE EARLY EIGHTIES ITS CONTRIBUTION TO THE GROSS DOMESTIC PRODUCT HAD GROWN FROM 15 PER CENT IN 1970 TO AROUND 23 PER CENT, COMPARED TO 21 PER CENT BY THE MANUFACTURING SECTOR.

IN THE EARLY 1970'S, THE FINANCIAL SECTOR PROVIDED EMPLOYMENT FOR ABOUT 2.5 PER CENT OF THE LABOUR FORCE. THERE WERE THEN 73 LICENSED BANKS, ALTHOUGH THE NUMBER OF SO-CALLED FINANCE COMPANIES WAS ON THE INCREASE. AT PRESENT, THERE ARE SOME 167 000 PEOPLE WORKING IN THE FINANCIAL SECTOR (6.6 PER CENT OF TOTAL EMPLOYMENT). A TOTAL OF 485 INSTITUTIONS ARE PERMITTED BY LAW TO TAKE DEPOSITS, COMPRISING 139 LICENSED BANKS WHICH OPERATE OVER 1 400 BRANCHES, 33 LICENSED, AND 313 REGISTERED DTCS.

+THESE 485 INSTITUTIONS NOW HAVE TOTAL HONG KONG BALANCE SHEETS OF ABOUT HK$1 000 BILLION, NET OF CONTRA POSITIONS BETWEEN THEMSELVES. TOGETHER THEY EMPLOY NEARLY 60 000 PERSONS AND CONTRIBUTE TO ABOUT SEVEN PER CENT OF THE GDP, MR BLYE SAID.

EXPLAINING THE ROLE OF THE GOVERNMENT IN THE DEVELOPMENT OF THE FINANCIAL SECTOR AND OTHER SECTORS OF THE ECONOMY, MR BYLE SAID THE GOVERNMENT'S CONCERN WAS TO PROVIDE A SUITABLE ENVIRONMENT, AS FAR AS IT COULD, FOR DEVELOPMENT, RATHER THAN TO DIRECT THAT DEVELOPMENT IN ANY PARTICULAR WAY.

IT COULD BE THAT THE GOVERNMENT'S PRESENCE AS REGARDS THE FINANCIAL SECTOR WAS MORE NOTICEABLE, BECAUSE IT HAD A MACRO RESPONSIBILITY IN MONETARY POLICY AND A MICRO RESPONSIBILITY IN THE SUPERVISION AND REGULATION OF FINANCIAL INSTITUTIONS AND MARKETS.

MR BLYE STRESSED HOWEVER THAT IT WAS NOT REGULATION FOR THE SAKE OF REGULATION, ADDING THAT OUR SYSTEM OF SUPERVISION AND REGULATION WAS EFFICIENT AND EFFECTIVE AND COMPARED WITH THE BEST IN THE WORLD.

INDEED OTHER REGULATORY AUTHORITIES HAD LEARNT FROM HONG KONG, HE SAID, +AND AT THE SAME TIME WE ARE ALWAYS LEARNING LESSONS.+

+ADMINISTRATIVE AND LEGISLATIVE CHANGES TO IMPROVE THE FRAMEWORK WITHIN WHICH BANKS AND DTCS OPERATE HAVE BEEN, AND WILL CONTINUE TO BE INTRODUCED,

+THIS IS PARTLY BECAUSE THE BUSINESS OF SUPERVISION AND REGULATION OF FINANCIAL INSTITUTIONS AND MARKETS IS CONTINUOUSLY EVOLVING AROUND THE WORLD TO MEET THE REQUIREMENTS WHICH HAVE IN THE LAST DECADE MOVED AT A STAGGERING PACE.

+GREAT STRIDES HAVE BEEN MADE AND WE HAVE EVERY INTENTION TO KEEP PACE WITH THESE ADVANCES IN THE CONTEXT OF OUR PARTICULAR NEEDS, HE SAID.

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