Publishing HKMA's Annual Report for 2000, Yam said both progress in reform to the international financial architecture and important advances in Hong Kong's own domestic infrastructure had been made during the year 2000.

"A milestone in the development of our domestic and regional financial infrastructure came with the completion, in the second half of 2000, of Hong Kong's US Dollar Clearing System," said Yam.

In regard to the Exchange Fund in 2000, Yam noted, "despite an extremely difficult investment environment, and general expectations of a loss, the Exchange Fund's assets rose by more than two percent during the year."

He observed that the banking sector had performed strongly in 2000, while good progress continued to be made in the HKMA's program of banking sector reform, including its program of deregulation.

Yam said the reform program had also taken a step forward in terms of increasing safety, with an HKMA proposal to introduce a deposit insurance scheme in Hong Kong receiving broad support both in the community and within the Legislative Council.

Yam noted that on-going efforts to increase transparency and accountability had continued to bear fruit during 2000, with the HKMA maintaining productive relations with legislators and expanding contacts with the District Councils.

Looking ahead, Yam identified two particular issues that would need to be addressed in 2001: whether a more developed framework was necessary for overseeing retail payment services, and how the HKMA should become involved in consumer issues relating to banking services.

(Xinhua 05/04/2001)