david carse : banking in hong kong after the asian crisis speech by mr david carse, deputy chief executive of the hong kong monetary authority, at a luncheon meeting of the ginyukai, held on 21 august 2000. * * * ladies and gentlemen, i am very pleased to be here to address this luncheon meeting of the ginyukai. although i meet japanese banks on an individual basis quite frequently, i see them as a group less often than i used to before the asian crisis. in my earlier days in hong kong, we used to meet regularly at the numerous opening ceremonies and receptions of japanese banks who were setting up new offices in hong kong. over the last two years however i have been dealing with the voluntary revocation of the licenses of many of these same banks as they depart the territory. this is a much sadder task than cutting the ribbon at an opening ceremony. the figures tell their own story. in march 1997, there were 91 japanese authorised institutions in hong kong. this includes some banks with multiple authorisations, for example as licensed banks and as deposit - taking companies. by june of this year, the number of authorised institutions had dropped to 35, a decline of 60 %. the reasons behind this decline are varied. some of the japanese banks were forced to cut their overseas operations, including those in hong kong, because of critical balance sheet problems and heavy losses. equally, it has to be said that a number of the regional banks who came to hong kong in the 1990s lacked a clear business rationale for doing so and found it difficult to make money. given the difficult economic climate back in japan, it was probably right for these banks to cut their losses and go home. even the japanese banks that stayed have cut back on their lending here. between march 1997 and june 2000, the total lending of the japanese banks in hong kong fell from just over hk $ 2, 000 billion to hk $ 643 billion, a decline of almost 70 %. this has reduced the japanese banks ’ market share of total loans in hong kong from 51 % in 1997 to around 25 %. of course, i am aware that these figures are a bit misleading, as mr kato of bank of tokyo - mitsubishi recently pointed out to the press. most of the decline in total loans was accounted for by euro - yen loans. these are yen loans to japanese borrowers that were formerly booked offshore in hong kong for a variety of reasons, including funding costs and domestic regulations.

mr yam presents the 1998 hong kong monetary authority ’ s annual report speech by the chief executive of the hong kong monetary authority, mr joseph yam, on the occasion of the presentation of the 1998 hkma annual report before the legislative council financial affairs panel in hong kong on 3 may 1999. introduction mr chairman, honourable members, i am most grateful to you for giving me this opportunity to speak to you on the occasion of the publication of the hkma ’ s annual report for 1998. the report is tabled at this meeting of the financial affairs panel ; it is also being distributed to all members of the legislative council this morning. this report covers the full range of the hkma ’ s work for the calendar year 1998, in addition to giving an assessment of the economic and banking environment for the year. i have no need to remind members that 1998 was, to put it mildly, an eventful year. the report sets out the many problems and challenges that the hkma has had to grapple with during the course of the year, and explains what actions and initiatives the hkma has been taking to address them. you are all familiar with these issues, and you have the details before you. so i do not wish to take up too much time with a long description. my main focus in this presentation will be on the challenges for the hkma in the coming year, particularly in the light of current economic trends. before i do that, however, i should like just to highlight the challenges and achievements of the past year, and to touch on an issue that i know is of concern to members : the question of accountability and transparency. the year in review nineteen - ninety - eight was an extremely tough year for hong kong. the asian financial crisis, and eruptions in other parts of the world, brought continuing instability. the effects on hong kong ’ s open and outward - looking economy were severe. gdp declined by 5. 1 %, the sharpest decline shown in gdp statistics dating back to 1961. the unemployment rate more than doubled, to 5. 7 % at the end of the year : it has, since then, increased still further. property and share prices plummeted, though they have since regained some of their lost value. the strains and uncertainties of recession have penetrated into every home and every business. the distress has been all the more acutely felt because the recession appeared with dramatic suddenness after many years of vigorous and uninterrupted growth. hong kong