Policy Address
Consolidating Hong Kong’s Status as an International Financial Centre
Maintaining Financial Stability and Striving for Development
41. As an international financial centre, Hong Kong has weathered one crisis after another. In the face of the challenges of the COVID-19 pandemic and global economic turmoil, we have confidently demonstrated the resilience and stability of our financial system. The linked exchange rate system has been operating smoothly. The Hong Kong dollar exchange rate has been on the strong side with capital inflow. The aggregate balance of the banking system increased significantly in the past year, reflecting continued investors’ interest and confidence in Hong Kong’s capital market. The banking system remains robust with major banks’ average liquidity coverage ratio and average capital adequacy ratio exceeding 156% and 20% respectively, both well above the international regulatory standards. From end-2019 to end-September this year, the total deposits of banks grew by 7.3%. Other facets of the financial services sector such as the securities and insurance markets also continue to operate in an orderly manner. In these turbulent times of international and geopolitical tension, the Government and the financial regulators will continue to closely monitor financial market development to ensure financial stability.
42. The current-term Government has proactively taken the initiative to consolidate Hong Kong’s status as an international financial centre and strengthen its competitive edge. For example, in the last legislative session, we proposed and secured LegCo’s passage of five bills in a row to drive the market development of private equity funds, insurance and MPF. This significant, policy-driven development is also found in our securities market. Since the Hong Kong Exchanges and Clearing Limited amended the Listing Rules in April 2018, a total of 36 companies with weighted voting rights structure, pre-profit biotechnology companies and secondary listed companies have been listed in Hong Kong, with a total current market capitalisation of over HK$11 trillion.
