HKMA Annual Report 2022 and Sustainability Report 2022

On April 28, 2023, the Hong Kong Monetary Authority, HKMA, issued a press statement to inform that it has released two new reports:
1. the Annual Report 2022 and
2. the so-called Sustainability Report 2022.
##### The first report, the Annual Report 2022,
– outlines the key challenges faced by the Hong Kong financial market in 2022 such as declining economic activity, the (gobal) rise of inflation, or the increase in interest rates (there was de facto a small increase of inflation in Hong Kong);
– summarizes key activities performed by the Authority last year, including the implementation of regulatory measures such as the Banking (Capital) (Amendment) Rules 2022 which implement the Basel III capital requirements for banks’ equity investments in funds or the issuance of various guidances such as the guidance for banks on virtual asset-related activities or the guidance for banks on suitability assessments;
– describes the key priorities of the regulator for 2023 and beyond, primarily including the maintenance of financial market stability, the resilience of the Hong Kong banking sector, the development of resolution standards for supervised institutions, or the implementation of remaining Basel III standards; and
– presents some basic statistic on the banking sector such as the average loan-to-value (LTV) ratio or the average debt servicing ratio (DSR).
##### The second report, the so-called Sustainability Report 2022,
– outlines the key priorities of the HKMA in the upcoming years as regards sustainability, including the enhancement of banks‘ resilience to climate change-related risks, the promotion of Hong Kong as a (the) „green and sustainable finance hub“ in Asia, or the promotion of sustainability within the regulator itself, e.g. via green investments;
– describes the activities that the HKMA has conducted to foster the Green and Sustainable Finance ecosystem in Hong Kong, including the creation of the Center for Green and Sustainable Finance or the exploration of a voluntatary carbon market in the city; and
– presents some key initiatives of the HKMA towards sustainable investments, both public and private investments. Such initiatives include, among multiple others, the collaboration with international organisations on the disclosure requirements of issuers, the engagement with numerous stakeholders to bring about sustainability along the value chain, or the enforcement of adequate stewardship among asset managers and the rise of awareness among investing clients as regards sustainability.