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The following is issued on behalf of the Hong Kong Monentary Authority:
The Hong Kong Monetary Authority (HKMA) today (April 20) published its Annual Report for 2008. The Report reviews trends and events in monetary and banking affairs and reports on the HKMA's work during the year. It also sets out plans for the coming year.
Mr Joseph Yam, Chief Executive of the HKMA, said in his statement in the Annual Report that, despite the global financial crisis and worldwide credit crunch, Hong Kong's monetary system remained intact and its financial system robust. The Hong Kong dollar had remained stable in 2008. The local banking sector, which entered the crisis in a stronger condition than many of its counterparts in other economies and was therefore better prepared to withstand its effects, remained robust. To further bolster market confidence and ensure ample liquidity in the financial system, the Government and the HKMA had introduced a number of precautionary temporary measures during the year.
In the banking sector, the average consolidated capital adequacy ratio and liquidity ratios of locally incorporated authorized institutions remained well above the statutory requirements. But local banks were not insulated from the effects of the global financial crisis. Profitability deteriorated and the cost-to-income ratios rose. Asset quality also showed some signs of deterioration, although the levels of problem loans remained low.
Mr Yam went on to say that the Exchange Fund continued to serve effectively its statutory purposes of maintaining the exchange value of the Hong Kong dollar and the stability and integrity of the monetary and financial systems. The conservative investment approach of the Fund had helped restrain investment losses in 2008 and had safeguarded the Fund from exposure to financial institutions that experienced problems during the year or to toxic investment assets.
Other developments in 2008 included the publication of the review of the Hong Kong Monetary Authorityˇ¦s Work on Banking Stability, the introduction of measures to make the RTGS systems and Central Moneymarkets Unit more efficient, the State Councilˇ¦s announcement of the expansion of the renminbi business in Hong Kong, the signing of the fifth supplement to CEPA, and steps taken to develop Islamic finance in Hong Kong.
The HKMA Annual Report 2008 may be purchased at the HKMA Information Centre or by post at HK$100 per copy. The Report is also available on the HKMA website.
Ends/Monday, April 20, 2009
Issued at HKT 20:10
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