But the Hong Kong Monetary Authority is doing more than just dishing out food containers to its staff. As part of a push to embrace green finance, the HKMA last year launched a joint committee with securities supervision authorities to urge companies to disclose financial information on climate change and to push them to issue more green bonds using subsidies.
“The qualities of an international financial center can be distilled in two words: opportunity and ecosystem”, said Eddie Yue, the HKMA’s chief executive. “Hong Kong’s opportunities can be summed up in three words: China, green and technology.”
The “one country, two systems” framework is applied in Hong Kong, and it is the HKMA, not the People’s Bank of China, that is responsible for the stability of the territory’s currency and its financial system.
Beijing has said it would maintain this formula until 2047, and after that the HKMA’s future will hinge on the territory’s status.
Eddie Yue, chief executive of the Hong Kong Monetary Authority, sees “China”, “green” and technology” as watchwords for the financial centre.
While the HKMA is a member of the Bank for International Settlements, the authority effectively doesn’t conduct its own monetary policy – instead it pegs the HK$ to the greenback. It also leaves the issuance of bank notes to private banks such as HSBC and Standard Chartered.
Dwarfed by mainland China with a population of just 7.4 million and no natural resources, Hong Kong needs to make use of its financial expertise to stay relevant alongside mainland China.
The HKMA is also ahead of its global rivals on digitisation. It began research in 2017 toward a central bank digital currency, and two years later, it launched a joint CBDC research project with the Bank of Thailand, which the PBOC joined in February. It is also considering introducing a virtual bank.
Central banks around the world, including the US Federal Reserve, the European Central Bank and the Bank of Japan, have goals such as stable prices and full employment. Some observers are critical of central banks adopting climate change measures as it can be seen as an intervention in certain industries.
That said, central banks around the world are jockeying for supremacy over green finance and digital currencies as they seek to take the initiative in rulemaking for new financial transactions.
Earlier this year, the Hong Kong government issued a 30-year green bond in collaboration with the HKMA, making it the first governmental institution to do so in Asia.
The government plans to issue green bonds worth HK$175.5 billion (US$22.5 billion) over the next five years, and hopes to make it a market benchmark.
Hong Kong moved one notch up to third place from the previous survey in the latest Global Financial Centers Index compiled by Z/Yen Group, a London-based think tank.