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Sharing his views on the global financial turbulence and his vision for the development of Hong Kong's financial markets, the Financial Secretary, Mr John C Tsang today (September 24) expressed empathy with small investors who had suffered losses as a result of Lehman Brothers' bankruptcy.
Speaking at the Hong Kong Association of Banks Distinguished Speaker Luncheon, Mr Tsang pointed out that the Hong Kong Monetary Authority and the Securities and Futures Commission had been meeting with the investors and offering them assistance, while keeping in close touch with the trustees and distributor banks concerned.
"The Monetary Authority and the Securities and Futures Commission have assured me that they will deal with investors' enquiries and complaints expeditiously. They will provide me, in about three months' time, their observations, lessons learned and issues identified during the process of investigating into the complaints received.
"Upon receipt of their reports, I shall ask the Secretary for Financial Services and the Treasury to undertake a systemic review and to consider, on a policy level, what can be done to further improve our regulatory framework and enhance investor protection and education."
Mr Tsang said that Hong Kong, given its open economy, was not immune to adverse regional or global economic developments. "The Government, together with the Hong Kong Monetary Authority, the Securities and Futures Commission, the Insurance Authority, the Stock Exchange and others, will take all necessary measures to ensure that our financial market remains stable and our economy can steer a smooth course amid global financial turmoil," he said.
"In the case of AIG and its two subsidiaries operating insurance business in Hong Kong, the Insurance Authority has exercised its statutory powers swiftly to safeguard their assets by requiring them to seek prior approval on all transactions involving transfer of assets or funds to other related entities within the same group. We will continue to keep a close watching brief on their operations.
"Similarly, the Securities and Futures Commission has also promptly issued restriction notices on four entities of Lehman Brothers to protect the assets of clients and the interest of investors.
"The Hong Kong Monetary Authority has injected HK$1.5 billion, $1.556 billion to be more precise, into our banking system in an effort to boost liquidity."
At the luncheon, Mr Tsang also talked about how Hong Kong could entrench its position as a pre-eminent global financial centre.
"From the Government's point of view, we will continue to join hands with our financial regulators to keep enhancing the competitiveness of Hong Kong amid the global financial turbulence," he said.
"We will continue to capitalise on our unique advantage of having the Mainland as our hinterland while, at the same time, we will maintain an international outlook and strengthen our status as Asia's world city. We will continue to tap new business opportunities in emerging markets, upgrade our market infrastructure and ensure that our regulatory regime aligns well with the fast-evolving global trend."
Mr Tsang stressed that Hong Kong should not lose sight of the importance of advancing financial stability. "We are reviewing our regulatory framework on an ongoing basis, with special emphasis on maintaining flexibility and responsiveness in prioritisation of issues, co-ordination of risk assessments and co-operation in policy development between the Administration and financial regulators."
He also noted that maintaining financial stability was no easy task, even with clear vision and dedicated efforts, especially under the irresistible trend of globalisation and financial sophistication. "We are aware that the ripples of the current crisis may have yet to play out fully. We will remain alert to global developments and maintain our financial stability and institutional resilience."
He emphasised that, "Financial services are a cornerstone of our economy, and banking is a core element of our status as a global financial centre. We will take all necessary measures to ensure stability in the financial sector during these difficult times."
Ends/Wednesday, September 24, 2008
Issued at HKT 14:59
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