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Following is a question by the Hon Cheung Man-kwong and a reply by the Financial Secretary, Mr John C Tsang, in the Legislative Council today (March 11):
Question:
The Hong Kong Monetary Authority (HKMA) has been established for 16 years but its terms of reference, governance structure and matters relating to the appointment and removal of its management etc. have not yet been provided in a piece of legislation at present. In this connection, will the Government inform this Council:
(a) given that the existing legislation has not provided for the tenure of office of the Chief Executive of HKMA and there are speculations in the community over the future move of the incumbent Chief Executive, whether the authorities have assessed if these uncertain factors have an adverse impact on the stability of the monetary and financial systems of Hong Kong;
(b) since it has been reported that the remuneration arrangement for the Chief Executive of HKMA has all along been a subject of criticism, whether the authorities have any plan at present to change the arrangement so as to enhance the accountability of HKMA; and
(c) whether the authorities have any plan at present to formulate a new piece of legislation to prescribe the status and organisational structure of HKMA, as well as to provide for the selection process, tenure of office, removal procedure and remuneration arrangement etc. of the Chief Executive of HKMA?
Reply:
President,
The monetary and financial systems in Hong Kong have all along been stable with no systemic risk. Since last September, we have introduced a series of measures to ensure the stability of the market and bolster public confidence in our financial systems. In view of the turbulence in the global financial markets, the Government and the regulators will continue to monitor closely the latest developments around the world and take further action as appropriate to maintain the stability of the financial system.
The Government has been working as a team. Postings and movement of individual staff members would not have any negative impact on our system.
As regards the second part of Hon Cheung's question, the Governance Sub-Committee of the Exchange Fund Advisory Committee conducts annual review on the remuneration of all HKMA staff, including the Chief Executive, in light of the findings of independent consultants on Hong Kong's pay trends and the pay levels in the financial sector. As Financial Secretary, I will take into account the recommendations of the Governance Sub-Committee, its assessment of the performance of HKMA staff during the preceding year and other relevant factors in making the appropriate decision.
As for the third part of Hon Cheung's question, the main functions of the HKMA are provided for by the Exchange Fund Ordinance and the Banking Ordinance. With regard to the appointment, dismissal and the remuneration of the Monetary Authority, section 5A(1) of the Exchange Fund Ordinance provides adequate flexibility for the Financial Secretary to make such decisions. I consider the current arrangement appropriate. The Government has no plan at present to formulate a new piece of legislation to prescribe the above issues.
Thank you, President.
Ends/Wednesday, March 11, 2009
Issued at HKT 12:04
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