Abstract
The previous chapters have been largely concerned with positive rather than normative analysis. Thus we have discussed in some detail banking expansion, banking structure and operations, the banks’ role in the determination of money supply and promotion of economic growth, and other related topics. The period covered — the postwar era from late 1945 to early 1973 — is now past history. It remains for us in this concluding chapter to discuss the future prospects for Hong Kong banking and currency, and the policy prescriptions needed to correct existing deficiencies. Before we do this it may be helpful to attempt a brief evaluation first of past performance.
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Notes and References
For a classic review, see A. G. Hart, ‘The “Chicago” Plan of Banking Reform’, reprinted in American Economic Association, Readings in Monetary Theory (London, 1952) pp. 437–56.
G. Davies, ‘Hong Kong Banking After the Crisis’, The Banker (Apr 1965) pp. 250–1.
For a recent review, see J. A. Marlin, ‘Bank Deposit Insurance’, Bankers’ Magazine (Sept 1969) pp. 115–20, (Oct 1969) pp. 175–82. Deposit insurance scheme outside U.S. has only been implemented in recent years in India, Canada, Lebanon etc as a result of banking failures. The author argues that an additional advantage of such a scheme for developing countries is that it will encourage savers to deposit with domestic banks rather than expatriate banks.
M. Friedman, A Program for Monetary Stability (New York, 1959) p. 21.
See H. Sutu et al., A Study of Government Financial Assistance to Small Industries (The Chinese University of Hong Kong, 1973, mimeographed).
For a comparison of export growth rates and wage levels in various less developed countries, see G. K. Helleiner, ‘Manufactured Exports from Less Developed Countries and Multinational Firms’, Economic Journal (Mar 1973) pp. 21–47. Hong Kong’s export growth rate during 1960–70 was found to be much lower than that of South Korea and Taiwan.
Recent developments in monetary theory suggest that the reserve currency countries which issue ‘world’ money to finance their payments deficit are in effect reaping seigniorage benefits. See R. A. Mundell, Monetary Theory (California, 1971) Chapters 15 and 17. Analogously, the uncompensated losses sustained by Hong Kong’s Exchange Fund may be regarded as a seigniorage tax paid to the United Kingdom.
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© 1974 Y. C. Jao
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Jao, Y.C. (1974). Prospects for Hong Kong Banking. In: Banking and Currency in Hong Kong. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-02199-4_10
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DOI: https://doi.org/10.1007/978-1-349-02199-4_10
Publisher Name: Palgrave Macmillan, London
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