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Re: Private banking

PJ Shah wrote:
>Hong Kong's currency board system is not really free banking but comes
>close to it.  The issue of currency is limited to two banks, Hongkong
>Bank and Standard Chartered.  No open entry--against the principle of
>free banking.  (Bank of China doesn't issue currency.)

My response:
I could be wrong but to my knowledge the currency board only controls the
exchange rate and the perhaps controls the total currency to be issued; i
think the board has monetary authority (which is govt.) and banks(private)

Bank of China does issue currency since early 1997. i have notes issued by
the bank in my wallet! 

Again, i have no first hand knowledge,  but i believe banks with certain
minimum capital, and strong base in Hong Kong are permitted to issue notes.
Only Hong Kong Bank and Chartered Bank meet this criteria. Bank of China
has been permitted mainly for political reasons. i have to repeat however
that i am talking only off the cuff.

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