Hong Kong banks operating environment becoming increasingly complex: HKMA

HONG KONG (AFX-ASIA) - The operating environment for banks in Hong Kong is becoming increasingly complex, as banks face the risks and opportunities brought about by financial liberalisation and technological advances, the Hong Kong Monetary Authority said in its newly released annual report. 	    "The programme of deregulation now in progress will provide further scope for competition and repositioning among banks in Hong Kong," HKMA chief executive Joseph Yam said in the report.	    Yam said in particular, the final stage in the deregulation of interest rate rules, expected to take place in July, will end the system under which the interest rates paid on most Hong Kong dollar deposits were fixed by agreement between the banks.	    Banks will need to handle the transition to a deregulated environment in a sensitive and transparent manner, he said.	    Yam said the HKMA is now studying whether a more developed framework is necessary for overseeing retail payment services, particularly with advances in information technology.	    "Our review of this subject is expected to be completed in the middle of 2001," he said.	    The HKMA is also taking a look at how far the monetary body should be involved in consumer issues relating to banking services, Yam said.	    "This is becoming an increasingly pressing issue because, as deregulation proceeds and the range and complexity of services expands, complaints and disputes are likely to increase," he said.	    The HKMA at present has no explicit mandate under the banking ordinance in relation to consumer issues, although it already plays an important part in formulating industry standards for banking services, he added. 

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