1 / 18

Hong Kong Monetary Authority

Hong Kong Monetary Authority. Briefing to the Legislative Council Panel on Financial Affairs. 3 January 2000. Y2K. Wellness checks completed Banks operating as usual. Economic Recovery. Real GDP Growth. Strong rebound in Q2 Q3 growth: 4.5%. Forecast. Exchange Rates.

kevina
Download Presentation

Hong Kong Monetary Authority

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Hong Kong Monetary Authority Briefing to the Legislative Council Panel on Financial Affairs 3 January 2000

  2. Y2K Wellness checks completed Banks operating as usual

  3. Economic Recovery Real GDP Growth • Strong rebound in Q2 • Q3 growth: 4.5% Forecast

  4. Exchange Rates Effective Exchange Rate Indices • REER back to pre-crisis level • Not a strong impediment to competitiveness Dec 1997 1998 1999

  5. Interest Rates Nominal Interest Rates • Stable since September 1998 • Premium over USD interest rates has narrowed

  6. Interest Rates Real Interest Rates • Long-term rate still high but has come down • Well below headline rate • Not as serious an obstacle to recovery as sometimes is thought (% p.a.) 14 12 Long-term expected real interest rate 10 Headline short-term interest rate 8 10.0 6 4 3.7 2 0 -2 -4 -6 -8 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99

  7. Domestic Credit Bank Lending • Domestic loans showed first rise in 17 months • Should increase further with continuing economic recovery & resolution of GDE issue 1996 1997 1998 1999

  8. Challenges and Opportunities Volatile Capital Flows Technology Globalisation Changing Financial Landscape Banks Small Open Economies • Consolidation for scale • Bigger markets • Strengthen own financial systems

  9. Challenges and Opportunities International Reforms • Risk Management • Transparency • Codeof Good Practices Regional Initiatives • AMU? • Bond Market • Technical Cooperation Domestic Responses • Self-strengthening • resources • market development • regulatory coordination • tighter rules

  10. Challenges and Opportunities WTO Role Principal • Knowledge of China • Proximity: geography, culture, language HK HK HK Intermediary Nature Physical Industries Knowledge-based Industries (entrepot; manufacturing) (financial, telecom, prof. services)

  11. Work Plan 2000 - Monetary 9/1998 9/1998 -8/2000 8/2000 8/2000 onwards Sub-committee on Currency Board Operations 7 Technical Measures Convergence of Convertibility Rates Ongoing review of system • Two-way convertibility • Transferability among Monetary Base components • Scheduled movement of CU rate of Aggregate Balance to 7.80 • Currency options • Electronic money • Dollarisation

  12. Work Plan 2000 - Monetary Possible Topics: • Competitiveness issues • Repercussions of Asian crisis on regional financial markets • Mainland’s financial developments and interface with Hong Kong • Monetary linkages among Asian economies

  13. Work Plan 2000 - Banking Interest Rate Deregulation Monitoring Indicators Monitoring Indicators July 2001 July 2000 • Time deposits < 7 days • Savings account • + • Current account

  14. Work Plan 2000 - Banking Depositor Protection Factors Plan • Increased Competition • Stability of the banking system • International Practice • Cost and moral hazard issues • Consultancy Study in H1 2000 • Public Consultation Deposit Insurance?

  15. Work Plan 2000 - Banking Credit Register Corporates Financing Request Loans Central Credit Register data Banks In-House Study in H1 2000

  16. Work Plan 2000 - Banking Consolidation • Market-based approach • HKMA, as supervisor, will facilitate • No mandated consolidation for healthy banks • Approaches to consolidation : • Alliance • Mergers and Acquisitions

  17. Work Plan 2000 -Infrastructure USD Clearing HKMA Settlement Institution USD Cheques Securities Trading in USD Bulk Clearing HKD RTGS USD RTGS In phases in H2 2000 • Enhance competitiveness as IFC • Enhance settlement efficiency • Enhance monetary stability

  18. Work Plan 2000 - HKMA in Community Accountability Transparency Accessibility • Website, • Bulletins, • Publications • Public • Education • Programme • Regular • Briefings • to LegCo • Exhibitions • at • Districts

More Related