ABSTRACT
Over the course of the period 1945-65, the banking system of Hong Kong was profoundly changed by pressures within and outwith Hong Kong. In these years, the restructuring of the Hong Kong economy and the general expansion of international banking created new demands for banking services. The immediate post-war uncertainty provided profit opportunities for smaller banks, in particular, and they greatly increased their capital. The slump of the early 1950s then weeded out many of the weaker institutions that had expanded too rapidly. After 1954, the economic prospects for the colony brightened, and increased wealth and greater political stability combined to tempt large amounts of hoarded cash and gold into bank deposits. In the absence of specialised property lenders, the building boom offered almost irresistible opportunities for speculative profits by banks, prompting an aggressive search for deposits. Political instability elsewhere, and the growth of the domestic export industry, increased the demand for the international commercial and financial activities of the colony, and enhanced the competitiveness of Hong Kong.
