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Following is a question by the Hon Mr Albert Ho and a written reply by the Financial Secretary, Mr John C Tsang, in the Legislative Council today (June 30):
Question:
While the Hong Kong Monetary Authority (HKMA) is part of the government structure, its funding comes from the Exchange Fund and its annual budgets are not subject to the scrutiny by this Council. Moreover, the Securities and Futures Commission (SFC) is the statutory regulator of the securities and futures market established under the existing legislation and its funding comes from levies on market transactions. Yet, SFC still submits its budget to the Panel on Financial Affairs of this Council and answers members' questions before the commencement of each financial year. In this connection, will the Executive Authorities inform this Council:
(a) why HKMA has not followed the practice of other government departments by submitting its budgets to this Council for scrutiny;
(b) whether they have assessed if allowing this Council to vet and approve the budgets of HKMA will have any adverse impact on the monetary policies; and
(c) whether HKMA will follow the practice of SFC to submit its budget to this Council and answer members' questions each year?
Reply:
President,
It is an internationally accepted principle that central banking institutions should be able to maintain an appropriate level of autonomy to avoid subjecting their operations to any political influence.
The Hong Kong Monetary Authority (HKMA) budget is scrutinised by the Exchange Fund Advisory Committee (EFAC) and its Governance Sub-Committee with advice provided before it is submitted to the Financial Secretary for approval.
The HKMA is accountable to the Financial Secretary through EFAC. It is also accountable to the community through the Legislative Council and other channels. It has been an established practice that the Chief Executive of the HKMA conducts regular briefings on the work of the HKMA for the Panel on Financial Affairs of the Legislative Council.
The existing arrangements are consistent with the principle of maintaining autonomy of central banking institutions while providing for an appropriate degree of accountability. The arrangements are also comparable to those applicable to major central banking institutions around the world. The arrangements are effective and do not need to be adjusted, and we will review the arrangements from time to time.
Ends/Wednesday, June 30, 2010
Issued at HKT 12:31
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