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Hong Kong banks have benefited from the continuing and accelerating integration of economies between Hong Kong and Chinese mainland, said Hong Kong Monetary Authority Chief Executive Joseph Yam on Wednesday.
Speaking to Hong Kong bankers, Yam said Hong Kong banks have benefited directly from measures taken to strengthen economic ties between Hong Kong and the mainland. One was the granting of easier and greater access to the mainland banking market under CEPA (the Closer Economic Partnership Arrangement) from January 1, and the other the introduction of personal renminbi business in February.
He said, on a macro level, as the renminbi moves at a measured pace towards full convertibility, it seems inevitable that an increasing proportion of the balance sheet of banks in Hong Kong be denominated in that currency. "The opportunities arising from the developments are promising."
"There are other initiatives being developed, with the aim of positioning the banking system of Hong Kong to take advantage of further financial liberalization in the mainland," he said.
However he noted that apart from the more immediate risks and potential risks, there are longer-term risks facing Hong Kong's banks, including structural shift in the banking sector, technology risk, diversification risk, and changing international standards.
(Xinhua News Agency June 17, 2004)
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