ABSTRACT
As Jao has noted, ‘the foreign exchange market is widely regarded as an extremely important criterion for evaluating an IFC’.1 This chapter will show that Hong Kong’s free market in foreign exchange was the foundation of its role as a regional and international financial centre in the 1950s. By 1957, the Far Eastern Economic Review proudly recorded that
Hongkong’s free exchange market has attracted many operators from foreign countries who have found every reason to be satisfied with the bankers and financiers established here … Several Chinese banks, erstwhile known as ‘native banks’, have remarkably increased their international connections and are today able of serving the needs of a global free market and also those markets where controls of some sort prevail … Possibilities of Hongkong/Far Eastern and Hongkong/Europe free exchange transactions offer many opportunities as enterprising Chinese bankers as well as European financiers are exploring them ever on the look-out for better international service and additional profits.2
