The Hong Kong government announced Tuesday that Joseph Yam, chief executive of the Hong Kong Monetary Authority (HKMA), will step down on Oct 1, after 16 years at the helm.
Hong Kong’s Financial Secretary John Tsang said in a statement that the government is in the final stage of finding a replacement. He is widely expected to be succeeded by Norman Chan, his former deputy, now serving as a director of Hong Kong Chief Executive’s office, however.
There was little reaction in the currency market as Yam's departure had been widely expected. The Hong Kong dollar was quoted at 7.7511/13 to the U.S. dollar.
“I don’t think Yam’s departure will change the direction of the HKMA policy and its implementation,” said James McCormack, head of Asian sovereign ratings at Fitch Ratings in Hong Kong. “The HKMA has a very strong institutional capacity,” He also praised Yam for increasing the credibility of the HKMA and the currency peg during his tenure, saying he left the organization in good shape.
Mr. Yam, 60 years old, was the Asia's longest-serving central-bank governor. He became the first chief executive of the HKMA in 1993, a post that carries no retirement age or defined tenure.
During his tenure, he strengthened the banking system and fended off an attack on Hong Kong's currency peg during the Asian crisis of 1997-98. Financial Secretary Tsang praised Yam's contribution to Hong Kong’s financial stability and said his departure won't affect monetary policies or financial stability.
Chief Executive Tsang also expressed praises on Yam, calling him a “competent, committed and outstanding leading financial official.” “Under his leadership, the HKMA has established a sound mechanism and has enhanced Hong Kong's status as an international financial centre by actively taking part in world financial affairs,” Tsang said in a statement.
It has been a great honor to serve the people of Hong Kong as Monetary Authority since 1993. Hong Kong has been through considerable change in the past 16 years and has weathered a series of crises and challenges,” Mr. Yam said.
“I am very pleased that, with the support of the various Financial Secretaries over the years, and of the community, my colleagues and I have been able to maintain and develop Hong Kong's monetary and financial systems, which have proved their robustness and continue to provide a firm basis for stability in the future”.
The key to the HKMA's effectiveness is the professionalism and hard work of its staff and it has been a real privilege to serve with such excellent and dedicated colleagues, he said in a statement.
He added that he looked forward to continuing to work with them in the coming few months and said that he had every confidence that the HKMA would continue to meet whatever challenges it might face in the future in the best interests of the people of Hong Kong.
Yam's departure follows almost weekly protests over regulation of financial products after the failure of Lehman Brothers Holding Inc. threatened the savings of thousands who bought so-called mini-bonds backed by the bank. The HKMA's Exchanged Fund lost HK$74.9 billion ($9.7 billion) last year as global equities slumped, after a record HK$142.2 billion gain in 2007.
During his tenure, Mr. Yam has been repeatedly criticized for his pay package. With a salary of HK$10.96 million ($1.5 million) in 2008, Yam has been described by Central Banking Publications as the highest paid central banker in the world, compared with Bernanke's $191,300 and Bank of England Governor Mervyn King's 283,564 pounds ($400,000) in 2007.
Mr. Yam likes to take his staff to walk Hong Kong’s many mountains on weekends. He is also keen on golf and opera. He did not say what he planned to do next. According to Caijing, the authoritative Chinese magazine, Mr. Yam would become an adviser to the People’s Bank of China, the country’s central bank, after retiring.