Hong Kong Monetary Authority Statement

Author: | Published: 5 Sep 2017
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Hong Kong's economic growth softened to 1.9% in 2016 alongside subdued global economic and trade activities. The labour market remained stable, with the unemployment rate staying at a low level of about 3.4%. Headline inflation moderated to 2.4%, reflecting easing pressures on domestic and external prices.

The Linked Exchange Rate System (LERS) continued to serve as an anchor for Hong Kong's monetary and financial stability. Despite a volatile external environment, the Hong Kong dollar remained stable against the US dollar throughout the year, reflecting the resilience of the LERS to external shocks.

The Hong Kong banking system remained robust with strong capital and liquidity positions, as well as healthy asset quality. In 2016, there was encouraging progress in legislative work to further promote banking stability. The Deposit Protection Scheme was optimised to streamline the pay-out process with a view to further strengthening depositors' confidence. The ordinance for establishing a cross-sectoral resolution regime in Hong Kong was enacted to address the systemic risks posed by financial institutions that are too-big-to-fail.

In addition to prudential supervision, considerable efforts have been made to promote financial inclusion to enhance the accessibility by businesses and individuals to banking services, improve the corporate governance of banks, and raise the competency of industry practitioners.

As an international financial centre, Hong Kong is constantly looking for new opportunities and exploring new frontiers to enhance the competitiveness of our financial services.

Blessed with the unique advantages under the One Country, Two Systems framework, Hong Kong maintained its lead as the global offshore renminbi business hub with the world's largest renminbi liquidity pool. The Shanghai-Hong Kong Stock Connect, initiated in 2014, the launch of the Shenzhen-Hong Kong Stock Connect last December and the impending launch of the Bond Connect should add further impetus to the development of Hong Kong's financial markets and will take Hong Kong's role as the gateway to mainland markets to new heights.

The grand and visionary Belt and Road Initiative will present Hong Kong with enormous opportunities. We have the financial prowess, experience and expertise to play a pivotal role in facilitating infrastructure financing, asset management and risk management for projects along the Belt and Road. To take full advantage of the opportunities, the Hong Kong Monetary Authority (HKMA) established the Infrastructure Financing Facilitation Office in July 2016 to provide a unique platform for information exchange, experience sharing and collaboration in infrastructure investment and financing. To date, the platform has attracted more than 60 partners from all over the world.

On fintech, several new initiatives have been introduced, including the Cybersecurity Fortification Initiative to enhance the cyber resilience of the banking system, the Fintech Innovation Hub and the Fintech Supervisory Sandbox to facilitate more speedy development and roll-out of new fintech products and services by the banking sector. The HKMA also launched a new licensing regime last year to promote the further development of the retail payment industry while safeguarding the interest of consumers.

Looking ahead, the global economy is still full of uncertainties. We will remain vigilant and take timely measures to maintain Hong Kong's financial stability. We will also leverage on our strengths to enhance Hong Kong's competitiveness as an international financial centre.




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