RTTNews - Friday, Norman Chan was named the Chief Executive of the Hong Kong Monetary Authority, with effect from October 1. He is set to replace Joseph Yam, 60, and will serve a term of five years, Financial Secretary John Tsang said.

Chan has a a deep understanding of the operation of Hong Kong's financial markets and banking supervision, Tsang said. He is an ideal person for this position.

As the chief executive of HKMA, Chan will earn an annual fixed pay of HK$6 million or slightly more than $774,000 a year, 32% less than Yam's salary. The ceiling on the performance-linked pay for Chan is set at HK$1.5 million for the first year. Yam's salary had invited controversy as he took nearly HK$12 million in 2008, when the U. S. Federal Reserve chairman earned just $191,300.

The 55-year old Chan inherits the top job at the HKMA at a juncture when the city's economy is undergoing one of its worst times. The economy contracted 7.8% year-on-year in the first quarter, which was the biggest fall since Asian financial crisis in 1998.

Further, the HKMA came under fire last year for its poor regulation of financial products linked to the failed U.S. bank Lehman Brothers.

Following the announcement of his appointment, Chan told reporters that he is not planning to change the Hong Kong dollar's peg to the U. S. currency. He also said it is crucial that HKMA must enhance the competitiveness of Hong Kong's financial services sector.

Chan joined the administrative service of the Hong Kong government in 1976. He was appointed the Deputy Director (Monetary Management) of the Office of the Exchange Fund in 1991.

When the HKMA was established in 1993 with Yam as the chief, Chan became an Executive Director. Further, he served as Deputy Chief Executive of the HKMA between 1996 and May 2005. In July 2007, he was appointed director of Hong Kong's Chief Executive Donald Tsang's Office. He ran the campaign for Tsang in his second bid for the top job in 2005. Starting December 2005 to June 2007, Chan joined the Standard Chartered Bank as Vice Chairman, Asia.

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