ENG-2001 — Page 133

FINANCIAL AND MONETARY AFFAIRS

Bankruptcy and Companies Ordinances, applies for disqualification orders against unfit company directors, supervises the work of outside liquidators and trustees, and monitors the funds held by liquidators in both compulsory and voluntary liquidations.

In order to alleviate the large increase in the workload of the Official Receiver, a tendering scheme has been established to contract out the summary winding-up cases to the insolvency practitioners in the private sector. Under the scheme, these insolvency practitioners are appointed by the Official Receiver as provisional liquidators in place of the Official Receiver and their remuneration is subsidised by government funds up to the limits submitted in their tenders.

During the year, the court made 9 151 bankruptcy orders, six interim orders in individual voluntary arrangements and 1 066 winding-up orders. The assets realised by the Official Receiver during 2001 amounted to $102.4 million, while $88.68 million in dividends was paid to creditors in 757 insolvency cases. There were 602 cases assigned under the scheme for contracting out of summary winding-up cases.

The Companies (Corporate Rescue) Bill, which was introduced into the Legislative Council in May, aims to put in place a statutory corporate rescue procedure for companies in financial difficulty. The Legislative Council has set up a Bills Committee to examine the bill.

Professional Accountancy

Hong Kong had 18 931 registered professional accountants at the end of 2001. Of these, 2 997 were certified public accountants (CPAs) or public accountants, who are in public practice and entitled to perform statutory audits. There were 1037 CPA firms and 101 corporate practices at the end of the year.

The Hong Kong Society of Accountants is a self-regulatory body established under the Professional Accountants Ordinance with a wide range of responsibilities for registering professional accountants, maintaining accounting, auditing and ethical standards for the profession and conducting training programmes and examinations to qualify professional accountants.

Monetary Policy

Hong Kong's monetary policy objective is to maintain currency stability. Given the highly externally oriented nature of the Hong Kong economy, this objective is further defined as a stable external value for the currency in terms of a fixed exchange rate against the US dollar at the rate of $7.80 to US$1. This clear monetary policy objective is achieved through the linked exchange rate system, which was introduced in October 1983 after a nine-year period in which the Hong Kong dollar floated and the exchange rate was volatile.

The linked exchange rate system is in essence a currency board system with two distinctive features: first, full backing of the monetary base; and second, convertibility between the monetary base and the reserve currency at the fixed exchange rate (i.e. $7.80 = US$1). In Hong Kong, the monetary base includes the amount of bank notes and coins issued, the Aggregate Balance (which is the sum of the clearing balances of the licensed banks held with the HKMA for the purpose of effecting the clearing and settlement of transactions between the banks themselves

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