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Following is the transcript of remarks (English portion) by the Financial Secretary, Mr John C Tsang, at a media session at the Central Government Offices, Main Wing, today (September 18):
Financial Secretary: The Co-Ordination Centre that was set up by the Financial Services and Treasury Bureau on Tuesday continued to keep a close watch on the market. Major regulators have reported to me regularly on major developments in the markets.
The stock and derivatives markets in Hong Kong continued to operate in a normal manner and trading, clearing and settlement have been operating in an orderly manner despite todayˇ¦s market movements. HKEx is monitoring the markets closely and they will continue to take appropriate risk management measures. Investors should take great care in managing their own risks.
In view of instability of the financial markets worldwide and volatility in the local markets, the Securities and Futures Commission (SFC) has stepped up their programmes of stress tests on brokers, and has obtained from them the latest information on their financial position. The SFC will ensure that the brokers comply fully with the capital requirements under the Financial Resources Rules.
The Hong Kong dollar exchange and money markets are operating smoothly. Short-dated Hong Kong dollar interest rates increased today, reflecting in part heightened concerns about global credit and liquidity condition as a result of recent developments in the global financial markets.
Taking into account market conditions, the HKMA, operating within the Convertibility Zone, purchased US dollars against HK dollars. The aggregate Balance is projected, as a result, to increase by HK$1.556 billion to HK$6.4 billion on September 22. HKMA will continue to monitor the market closely and, if necessary, inject liquidity into the market.
On the insurance side, AIA (Bermuda) and AIA Co. Ltd, the two subsidiaries of AIG operating life insurance business in Hong Kong, have stressed in a press statement issued today that they are separate legal entities, independent of other units in the same group, that they are financially sound, and that they will continue to honour their commitments to all policyholders.
The IA will maintain close vigilance on new developments regarding the restructuring plan of AIG, while monitoring closely the respective financial positions of AIA(Bermuda), AIA Co. Ltd. and other AIGˇ¦s insurance entities in Hong Kong and striving to ensure that their daily operations are conducted in a smooth and effective manner.
I will, after the markets have closed tomorrow, give a briefing to LegCo Members on the latest developments. I will, as I have done this week, brief members of the media thereafter.
Reporter: If the market is falling again, will the government step in?
Financial Secretary: We have not stepped in.
Reporter: But will you do that?
Financial Secretary: We have no intention of doing that.
Reporter: How far is the HKMA willing to inject moneyˇDˇDˇDˇH
Financial Secretary: We have to look at the situation. I canˇ¦t answer your question hypothetically.
(please also refer to the Chinese portion of the transcript.)
Ends/Thursday, September 18, 2008
Issued at HKT 19:08
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