Regular on-site checks on banks are conducted to ensure their risk management systems are effective and adequate in identifying, measuring, monitoring and controlling various risks.

Responding to a question in the Legislative Council today, Secretary for Financial Services & the Treasury Frederick Ma said if weaknesses or deficiencies are identified, the Monetary Authority will require the banks concerned to promptly fix the problems.

Mr Ma said 778 examinations were conducted in the past three years, with about 190 in the first eight months of this year.

Mr Ma said the authority's approach - continuous supervision - is consistent with the relevant Basle Committee's Core Principles on Banking Supervision.

Apart from on-site examinations, the authority conducts analysis and assessment of the asset quality of individual banks.

"I would like to emphasise that the banking supervisory standards of Hong Kong are fully in line with international standards and are consistent with those in other major international financial centres," Mr Ma said.

"This is confirmed by the very satisfactory results of the International Monetary Fund's recent assessment of Hong Kong's compliance with the Bank of International Settlement's core principles of banking supervision," Mr Ma added.

"Further, the effectiveness of Hong Kong's supervision of banks is demonstrated by the fact that Hong Kong has a sound and stable banking system which has a high capital adequacy and liquidity ratio as well as good asset quality."