Professional Documents
Culture Documents
David Carse Deputy Chief Executive Hong Kong Monetary Authority 9 November 1999
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Introduction
Main focus will be on banking regulatory issues in the Region The main challenge for regulators is to restore their banks to health in the wake of the Asian crisis and to keep them that way
has required fire-fighting measures to resolve problem banks and restructure banking systems also requires ongoing improvements in prudential regulation and supervision
But there is also the longer-term strategic challenge of how to respond to global banking trends and increased competition
Greater autonomy for supervisors and in some cases new supervisory agencies
Risk-based supervision
This trend reflects the view that supervisors need to know more about the risks actually being run by their banks and the quality of the systems used for identifying, measuring and controlling these risks
more forward looking preventative rather than curative
This will require major improvements in supervisory resources and capacity in the Region Global standards like the Basel Committees Core Principles can assist in this process
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Compliance will be a factor in allowing low risk weightings in the revised Basel Capital Accord
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Internationalization of regulation
The Core Principles and the new Accord are examples of the increasing trend towards common international supervisory standards and a greater preoccupation with enforcement of these standards This is a good thing given the linkages between banking systems demonstrated by the Asian crisis
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How to ensure that domestic banks are equipped to meet these challenges
foreign ownership consolidation
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Allow wider access to the interbank payments system through the Real Time Gross Settlement system
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Conclusions
Asian regulators face formidable challenges
dealing with the aftermath of the Asian crisis which is by no means over for many banks corporate restructuring attempting to upgrade the quality of their supervisory policies and approach effective application of bankruptcy laws confronting a more competitive, complex and risky global environment balancing liberalization and domestic stability and national interest issues
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Conclusions (2)
Much has been done in the Region, but even more remains to be done This will require the assistance of the international community, and for talk to be translated into action While not denying the micro reasons for the Asian crisis, we should not overlook flaws in the international financial architecture which have not yet been fully addressed
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