The reform policy which started in the Mainland since the end of the 1970s has not only been the major driving force for the significant economic growth there, but has also contributed to the economic development of both Hong Kong and Macao. As a result of this favourable economic situation, as well as the political stability achieved in Portugal, which at the time administered the territory, Macao could capitalise on the conditions and the rapid pace of the regional development.
Realising the need to draw up an appropriate and regulatory framework for this opportunity, the previous administration of Macao created in 1980 the Issuing Institute of Macao1 (IEM) as the regulator of the financial sector of Macao, which includes banking, insurance and other credit related activities. The main objective was to ensure sound growth of the financial sector and to protect the interests of those involved as allowed by law. Responsible for the issuing of the local currency, the pataca, as well as the management of the exchange reserve of Macao, the IEM in fact played the role of a quasi-central bank and currency board of Macao.
On the banking side, a newly amended decree law was enacted on August 3, 1982. After eleven years of implementation, and realising the need to cope with the fast-changing banking industry, the Financial System Act of Macao was promulgated on July 5, 1993. On the insurance side, respective legislation were effected on December 28, 1981, February 20, 1989 and June 30, 1997, in order to cope with the pace of the development of the insurance industry.
Both banking and insurance industries have achieved remarkable growth over the years as a result of the establishment of appropriate regulatory institution and of timely legislative and supervisory practices. The Government also realised the need, after years of solid experience, to define clearly the authority and responsibilities of the regulatory institution. In that regard, the Monetary and Foreign Exchange Authority of Macao2(AMCM) was created on July 1, 1989. The newly established institution was assigned with clearly defined functions and administrative, financial and patrimonial autonomy.
On December 20, 1999, the Macao Special Administrative Region (SAR) was established upon the return to the People's Republic of China. In order to be more in line with common practice, the name of the institution became simplified as Monetary Authority of Macao3 while the acronym AMCM maintained. The autonomy, all functions and responsibilities of the AMCM remain unchanged. In addition, the Macao SAR Government assigned to the AMCM the additional responsibility of managing the reserve fund of the Macao SAR effective from April 1, 2000.
The AMCM now supervises monetary and financial operations according to the terms established in the regulatory statutes governing each respective area. It also advises the SAR Government on policies which facilitate the sustainability of the long-term growth of the financial sector and thereby achieving the purpose of long-term financial stability and development. Besides, the AMCM is prepared for streamlining the legal framework as well as adopting international best practices for the development of Macao as a financial services centre. It is also responsible for monitoring the external solvency of the local currency, the pataca, and ensuring the currency's full convertibility.
1. Instituto Emissor de Macau, in Portuguese.
2. Autoridade Monetaria e Cambial de Macau, in Portuguese.
3. Autoridade Monetaria de Macau, in Portuguese.
Last revision: 2016-02-02 09:37:36