Competition and Hong Kong's Major Economies Sectors: Financial Services

Abstract

Along with London, New York, Frankfurt and Singapore, the financial district of Hong Kong has always played a major role in the global financial services industry. Despite its small size, Hong Kong is well integrated into the financial networks that drive the global economy. In wholesale and investment banking the market players tend to be global businesses with diverse commercial interests. Any transaction in Hong Kong is likely to affect businesses elsewhere and vice versa. In recent years there has been a significant spotlight on the way that financial markets operate, and the Libor settlement in the US as well as the more recent Forex settlement have shown the role that competition law has to play in ensuring the proper functioning of financial markets. Competition law is not in conflict with regulatory objectives. To the contrary, it can be a useful additional tool to ensure that markets remain open and competitive. Competition law and policy need to become part of the culture of financial services markets and of the institutions that participate in those markets. As the Governor of the Bank of England said in a recent speech in London: “Real markets are professional and open, not informal and clubby.” The challenge for Hong Kong will be to use its new competition law to ensure that its financial services industry remains a market leader, professional and open.

Keywords: Hong Kong, competition law, antitrust, financial services, loan syndication, benchmark manipulation, information exchange

JEL Classification: K21, G28, L4