ENG-2007 — Page 109

Financial and Monetary Affairs | 69

kilo bars3. Prices closely follow those in the other major gold markets in London, Zurich and New York.

Hong Kong continues to be one of the most open insurance centres in the world. Among the 178 authorised insurers at year-end, 88 were from 22 overseas countries or the Mainland. Fifteen of the world's top 20 insurers are authorised to carry on insurance business in Hong Kong either directly or through a group company. There are 21 professional reinsurers in Hong Kong, including most of the top reinsurers in the world. Gross premium income in 2006 was $156 billion.

The Hong Kong Monetary Authority (HKMA) worked with relevant government bureaux to foster a better understanding of Hong Kong's economic and financial strengths among international credit rating agencies. The combined effort contributed to a number of rating upgrades in 2007, putting Hong Kong in the AA category accorded by all major international rating agencies. AA is the highest rating ever given to Hong Kong. The rating and outlook upgrades reflected international recognition of Hong Kong's strong economic fundamentals, as well as improved public finances and growth prospects.

Banking Sector

Main Features

Hong Kong maintains a three-tier system of deposit-taking institutions licensed banks, restricted licence banks and deposit-taking companies. They are collectively known as authorised institutions (Als) under the Banking Ordinance. The HKMA is the licensing authority for all three types of Als.

Only licensed banks may conduct full banking services, including in particular the provision of current and savings accounts and acceptance of deposits of any size and maturity. Restricted licence banks may take deposits of any maturity of $500,000 or above. Deposit-taking companies may take deposits of $100,000 or above with an original maturity of at least three months. Many deposit-taking companies are owned by, or otherwise associated with, licensed banks.

Hong Kong has one of the highest concentrations of banking institutions in the world. At the end of 2007, there were 142 licensed banks, 29 restricted licence banks and 29 deposit-taking companies, which included the operations of banks from 30 countries around the world. The 200 Als maintained an extensive network of 1 352 local branches. In addition, there were 79 representative offices of overseas banks in Hong Kong.

The total deposit liabilities of all Als to customers and the total loans and advances extended by these institutions at the end of 2007 were $5,869 billion and $2,962 billion respectively. The total assets of all Als amounted to $10,352 billion.

Hong Kong has a robust interbank payment system, which operates through the Real Time Gross Settlement (RTGS) system. The Hong Kong dollar RTGS system,

3

Tael bars are of 99 per cent fineness and weighted in taels (one tael equals approximately 1.20337 troy ounces). Kilo bars are of 999.9 parts per thousand fineness and weighted in kilograms.