HK’s central banker to step down after decade in charge

Norman Chan

Hong Kong’s de facto central bank is bidding farewell to its chief after a decade, starting the search for a successor at a time when the city faces an outlook made uncertain by the slowing Chinese economy and the trade war with the U.S.

Norman Chan, who has been the Chief Executive of the Hong Kong Monetary Authority since 2009, will retire on Oct. 1 at the end of his second five-year term.

The HKMA’s main task is defending the city’s currency peg to the U.S. dollar, meaning the former British colony’s monetary policy is imported from Washington even as its status as a center for trading in China’s currency, the yuan, grows.

Chan took office as Hong Kong was being buffeted by the global financial crisis, and leaves it amid increasing vulnerability due to record property prices and the protectionist threat to the open trade that the city thrives on.

“Norman has been leading the HKMA since 2009 and has worked tirelessly over the years to strengthen the city’s monetary and banking systems and promote Hong Kong’s position as an international financial center in Asia,” Financial Secretary Paul Chan said in a statement. He will chair a selection panel to identify the next chief executive, the government said.

Chan, 64, is one of the world’s best-paid central bankers, despite his institution’s limited role in setting policy. He earned HKD10.8 million (USD1.4 million) in 2017, including HKD2.6 million in performance-linked variable pay and HKD1 million in benefits such as life insurance. His total remuneration was more than four times that of Bank of Japan Governor Haruhiko Kuroda’s, about 40 percent above Bank of England Governor Mark Carney’s and more than seven times that of the Federal Reserve chairman.

The HKMA chief has acted as a determined advocate of the Hong Kong dollar peg, once referencing his memories of long queues and empty shelves in supermarkets due to currency instability. In 1983, the local currency slid sharply against the greenback as China and the U.K. negotiated Hong Kong’s return to mainland rule. MDT/Bloomberg