ENG-2016 — Page 106

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Financial and Monetary Affairs

effective working of the banking system, while at the same time providing flexibility for Als to make commercial decisions.

Recent Developments

The Hong Kong banking sector remained resilient in 2016 despite global market volatility and uncertainties arising from political events such as Brexit and the US presidential election. The quality of retail banks' assets remained healthy by historical standards. Liquidity ratios of Als remained well above the regulatory minimum. Locally incorporated Als continued to be well capitalised.

At the end of 2016, total deposits and total loans and advances of Als amounted to $11,727.2 billion and $8,023.4 billion respectively, marking increases of 9.1 per cent and 6.5 per cent from a year earlier. Total assets rose 7.7 per cent to $20,654 billion.

Statistics on Als

2014

2015

2016

Als

203

199

195

Of which:

LBs

159

157

156

RLBS

21

24

22

DTCs

23

18

17

Local branches of Als

1,384

1,370

1,289

Total deposits ($ billion)

10,073.1

10,749.7

11,727.2

Total loans and advances ($ billion)

7,276.3

7,534.5

8,023.4

Total assets ($ billion)

18,441.5

19,181.1

20,654.0

The HKMA keeps a vigilant watch on the property mortgage business of Als. It has introduced seven rounds of countercyclical macroprudential measures since 2009 to ensure Als' resilience in coping with a potential property downturn.

The HKMA established the Fintech Facilitation Office in 2016 to facilitate the healthy development of the fintech ecosystem in Hong Kong. The office acts as:

• a platform to exchange ideas about innovative fintech initiatives among key stakeholders and to conduct outreach activities,

⚫ an interface between market participants and HKMA regulators to improve the industry's

understanding about the parts of the regulatory landscape which are relevant to it,

⚫ an initiator of industry research in potential application and risks of fintech solutions, and

• a facilitator to nurture talent to meet the growing needs of fintech in Hong Kong.

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