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Financial and Monetary Affairs

Hong Kong has one of the highest concentrations of banking institutions in the world. At the end of 2013, there were 156 LBs, 21 RLBs and 24 DTCs. These 201 Als maintained a network of more than 1,380 local branches. There were also 62 representative offices of banks incorporated outside Hong Kong.

Hong Kong Monetary Authority

The HKMA's objectives are to maintain currency stability within the framework of the linked exchange rate system through sound management of the Exchange Fund, monetary policy operations and other means deemed necessary; to promote safety and stability of the banking system through the regulation of banking business, the business of taking deposits and the supervision of Als; and to promote efficiency, integrity and development of the financial system, particularly the payment and settlement arrangements.

The HKMA is an integral part of the government, but can employ staff on terms that differ from those of the civil service to attract personnel of the appropriate experience and expertise. The HKMA is accountable to the Financial Secretary, who is advised by the Exchange Fund Advisory Committee on investment policies and strategies for the Exchange Fund and on projects that are charged to the Exchange Fund, such as the development of financial infrastructure.

The Banking Advisory Committee and the Deposit-taking Companies Advisory Committee are established under the Banking Ordinance to give advice on relevant policy matters. They are chaired by the Financial Secretary and comprise members from the banking industry and other professions.

The HKMA seeks to maintain a regulatory framework that is fully in line with international standards. The aim is to devise a prudential supervisory system to help preserve the general stability and effective operation of the banking system, while at the same time providing sufficient flexibility for Als to make commercial decisions.

Recent Developments

The Hong Kong banking sector remained robust in 2013, despite the heightened uncertainties in the global economy and external environment. Credit growth was high during the year but asset quality remained sound. The liquidity ratio was healthy and locally incorporated Als continued to be well capitalised.

At the end of 2013, Als' total deposits and the loans and advances extended by Als totalled $9,178 billion and $6,457.4 billion respectively, 10.6 per cent and 16 per cent higher than a year earlier. Als' total assets also rose 14 per cent, to $16,943.5 billion.

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