TNAG-0607-FCO40-755-Monitoring-progress-made-on-planning-papers-on-Hong-Kong-1977 — Page 125

(3) Financ. il.

12

Monetary Affairs Branch

36

Before learing the financial section of this speech I would

like to refer to the series of administrative reforms connected with

the creation of the Monetary Affairs Branch of the Government Secretariat

under the direction of a Secretary for Monetary Affairs who is responsible

to the Financial Secretary. They are important, though they have received

little attention. The creation of the Branch followed the transfer to

the Secretariat from the Treasury in 1975 of the responsibility for the

management of the Government's financial assets, and the transfer to the

Exchange Fund of the Government's foreign currency assets and all of the

assets of the Coinage Security Fund.

37.

The Monetary Affairs Branch has two main functions. One is

for responsibility for all Exchange Fund matters. The other is concerned

with monetary and banking policy, and also exchange problems. The office

of the Commissioner of Banking will remain a separate self-contained unit

within the Monetary Affairs Branch, with statutory responsibility for the

prudential supervision of financial institutions.

38.

Two other developments are planned. The first is the transfer

to the Monetary afairs Branch of Treasury functions connected with the

supply of notes and coins to the banking system. The other will result

in the Exchange Fund taking over the Hong Kong dollar assets of the

General Account, other than those required for day to day business.

The Exchange Fund will then effectively become banker to the Government.

When these moves have been completed all of what may be described as

the central banking functions presently carried out by the Government,

and also the control and management of all the Government's financial

assets, will have been located in the Monetary Affairs Branch under the

direction of the Secretary for honetary Affairs.

/39. I am