According to Alberto Heimler, the former director of the Italian Competition Authority, banking regulation originates from microeconomic concerns over the ability of bank creditors (depositors) to monitor the risks originating on the lending side and from micro and macroeconomic concerns over the stability of the banking system in the case of a bank crisis.

a. As an international financial centre in Asia, Hong Kong has a sound but not simple regulatory system to supervise banks. Assess the particular duties of the following regulatory bodies in regulating banks in Hong Kong:

• The Hong Kong Monetary Authority(HKMA)
• The Financial Services and the Treasury Bureau (FSTB)
• The Hong Kong Association of Banks (HKAB)