Prospects for Hong Kong Banking
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.
KeywordsCentral Bank Commercial Bank Money Supply Banking Sector Trade Credit
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Notes and References
- 1.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.Google Scholar
- 2.G. Davies, ‘Hong Kong Banking After the Crisis’, The Banker (Apr 1965) pp. 250–1.Google Scholar
- 3.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.Google Scholar
- 4.M. Friedman, A Program for Monetary Stability (New York, 1959) p. 21.Google Scholar
- 5.See H. Sutu et al., A Study of Government Financial Assistance to Small Industries (The Chinese University of Hong Kong, 1973, mimeographed).Google Scholar
- 7.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.Google Scholar
- 8.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.Google Scholar