Minister rejects fixed tenure for central banker
The financial services minister has publicly rejected the idea of setting a fixed tenure for the Hong Kong Monetary Authority chief executive after incumbent Joseph Yam Chi-kwong lamented that he was the only central banker in the world without a contract term.
'The nature of the HKMA's work is unique and different from other overseas central banks so there should not be any direct comparison,' Secretary for Financial Services and the Treasury Chan Ka-keung told legislators yesterday at a monthly financial affairs panel meeting.
He urged them not to compare Hong Kong with the United States, Europe, Japan or other major developed countries, which all have a fixed tenure of four to eight years for their top monetary official.
The Exchange Fund Ordinance allows the financial secretary to appoint the HKMA head 'on such terms and conditions as he thinks fit''.
Professor Chan said that since it was the financial secretary who appointed the HKMA chief, the system allowed the former 'maximum flexibility to decide on the length of the [latter's] appointment'.
He added that the financial secretary set monetary policies; the HKMA chief was merely 'the one to execute the policies'.
'Such a division of labour has worked smoothly since its inception in 1993 and shows no need for changes,' he said.
Civic Party legislator Ronny Tong Ka-wah has been critical of the lack of fixed tenure for Mr Yam. He said it meant Financial Secretary John Tsang Chun-wah could determine how long - or short - Mr Yam's stay in office would be, which might affect the HKMA's independence.
A senior government source told the South China Morning Post earlier that Mr Yam had wanted a fixed term of another five years, but the government wanted him to step down next year because he had reached the civil service retirement age. The speculation in banking circles is that Mr Yam's former deputy, Norman Chan Tak-lam, a close ally of Chief Executive Donald Tsang Yam-kuen, is favoured to succeed him.
Legislator Chim Pui-chung, representing the financial sector, said: 'Hong Kong should have a fixed tenure for the HKMA head. If Chief Executive Donald Tsang Yam-kuen only has a tenure of five years, why does the HKMA chief executive not have any tenure?'
The Frontier legislator Emily Lau Wai-hing said the HKMA chief, ranked the world's best-paid central banker for his pay package of HK$10.33 million last year, might be paid too much.
Mr Yam earns three times more than the financial secretary, who is on about HK$3 million a year. He has justified the amount by saying that as the HKMA oversees banks, its chief's salary should be in line with the practices of the financial services sector rather than those of the government.
