IMF reaffirms Hong Kong's status as global financial hub
HONG KONG - The Hong Kong government on Wednesday welcomed the International Monetary Fund (IMF) report which reaffirmed the city's position as an international financial centre with a resilient financial system, sound macroeconomic and prudential policies, and robust regulatory and supervisory frameworks.
In a statement, the government noted that the IMF’s Financial System Stability Assessment Report showed that Hong Kong's macroeconomic and prudential policies have provided it with important buffers to cope with the current economic slowdown and future shocks.
“Rigorous stress tests performed by the IMF confirmed that Hong Kong's financial system remains resilient in extreme stress scenarios,” the statement reads.
The report noted that robust regulatory and supervisory policy frameworks are in place to support the financial sector's development, and the institutional framework for systemic risk monitoring and oversight is well established.
“The banking sector remains well capitalized, profitable, and nonperforming loan ratios remain low," the IMF report reads.
"Hong Kong SAR’s exchange rate mechanism, the Linked Exchange Rate System, has continued to support financial stability, and is underpinned by large foreign exchange reserves,” it added.
Hong Kong is a major international financial centre with one of the largest financial sectors in the world. Its banking system holds assets equivalent to around 9.5 times its gross domestic product (GDP), and is a major contributor to the profitability and total assets of several global systemically important banks.
The city is a global asset and wealth management centre, with assets under management amounting to 10 times its GDP in 2019, and it hosts one of the world's largest stock exchanges, with a market capitalization of US$6.1 trillion.
The financial hub’s life insurance sector is also among the world's largest, and it has the largest foreign exchange swap market in Asia, the report added.
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