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The Chief Executive, Mr Donald Tsang, outlined the measures Hong Kong had taken to maintain financial and economic stability when addressing the plenary session of the Asia-Pacific Economic Cooperation (APEC) 2011 CEO Summit in Honolulu today (November 11, Honolulu time).
In a speech entitled "Seeking stability in an unstable world", he said that as a small externally-orientated economy and international financial centre, Hong Kong's best protection against the current instability was to keep its own house in order.
"We must also remain vigilant to the highly volatile market conditions worldwide. The best way to achieve this is to build on our strengths and shore up our more vulnerable areas," Mr Tsang said.
He said that to enhance supervision of credit rating agencies (CRAs), Hong Kong had amended laws to introduce a new regulatory regime for CRAs operating in the city.
"Under the new regime, both corporate CRAs and their individual rating analysts have to be licensed by our Securities and Futures Commission. They are also subject to a CRA Code of Conduct. The changes have been in place since June.
"In regard to short selling, we already have a robust regulatory regime, including banning naked short-selling and the uptick rule. We are working on a new short position reporting regime to be implemented next year. This will assist regulators in monitoring the overall market situation and help maintain market stability.
"On banking, we have submitted to our legislature the necessary legislative amendments required to implement the latest Basel Accords in a timely manner," said Mr Tsang.
Emphasising the importance of seeking out new development opportunities, the Chief Executive said one of Hong Kong's most important roles as China's global financial centre was to promote offshore business using Renminbi.
"We look forward to playing a full and pivotal role in the gradual liberalisation of the Mainland currency. Not only will this firm up Hong Kong's financial services sector in times of global uncertainty, it will - I believe - provide stability and opportunity to the global financial system," Mr Tsang said.
Earlier in the morning, the Chief Executive met President Hu Jintao and briefed him on Hong Kong's latest developments.
In the evening, he attended a reception for Hong Kong businessmen and prominent local interlocutors hosted by the Secretary for Commerce and Economic Development, Mr Gregory So.
On November 13, Mr Tsang will attend the APEC Economic Leaders Meeting. During his stay in Honolulu, he will meet the US Secretary of State, Mrs Hillary Clinton. He will depart for Hong Kong on the morning of November 14.
Ends/Saturday, November 12, 2011
Issued at HKT 13:01
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