ENG-2017 — Page 113

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Financial and Monetary Affairs

The asset quality of the banking sector stayed healthy, the liquidity positions of Als remained robust, and locally incorporated Als continued to be well capitalised.

At the end of 2017, total deposits and total loans and advances of Als amounted to $12,752.5 billion and $9,313.7 billion respectively, marking increases of 8.7 per cent and 16.1 per cent from a year earlier. Total assets rose 10.1 per cent to $22,731.3 billion.

Statistics on Als

Als

Of which:

LBs

RLBs

DTCs

Local branches of Als

Total deposits ($ billion)

Total loans and advances ($ billion)

Total assets ($ billion)

2015

2016

2017

199

195

191

157

156

155

24

22

19

18

17

17

1,370

1,289

1,261

10,749.7

11,727.3

12,752.5

7,534.5

8,023.4

9,313.7

19.181.1

20,652.3

22,731.3

The HKMA keeps a vigilant watch on the property mortgage business of Als. It has introduced eight rounds of countercyclical macroprudential measures since 2009 to strengthen the risk. management of Als' mortgage lending business and the ability of mortgage borrowers to cope with a potential property market downturn.

Following the launch of the Fintech Facilitation Office in 2016, the HKMA stepped up its efforts in developing Hong Kong as a fintech hub in Asia. It published the second Distributed Ledger Technology (DLT) Whitepaper to address implementation issues. The proof-of-concept results described in the whitepaper led seven local banks to build a Hong Kong Trade Finance Platform. The HKMA also began research on a central bank digital currency, launched with. Cyberport a Haccelerator platform to run competitions, organised with the Hong Kong Applied Science and Technology Research Institute a Fintech Career Accelerator Scheme to nurture talent, started formulating a policy framework on an Open Application Programming Interface for the banking sector and entered into agreements with Shenzhen, Singapore and Dubai on fintech cooperation, including a joint project with the Monetary Authority of Singapore to build a cross-border trade finance platform based on DLT.

In September, the HKMA announced a number of initiatives that would prepare Hong Kong for its move into a new era of smart banking. On the supervisory front, the HKMA enhanced its Fintech Supervisory Sandbox to version 2.0, with new features including a chatroom facility. accessible to both banks and technology firms, and the establishment of linkages among the sandboxes of the HKMA, SFC and IA so as to provide a single point of entry for trials of cross- sector fintech products. The HKMA also launched a Banking Made Easy initiative to identify and minimise regulatory friction in online customer journeys regarding remote onboarding and account maintenance, online finance and online wealth management. The existing Guideline

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