THE revised list of banks fixing the daily HIBOR (Hong Kong interbank offered rate) is a belated yet welcome present to the market.
Occasional murmuring in the money and capital markets pointed to grievances by some players that reference banks sometimes marked the rates slightly up.
The dominance of the group by foreign banks which are active lenders in the syndicated loan market has fuelled suspicion that the actual cost of funds may be distorted.
It was rumoured that the Hong Kong Association of Banks' move was primarily triggered by such market comments.
As the rate is widely used for benchmarking lending, a realistic rate will benefit both the market players themselves and other users of the rate such as big corporates.
It is a move that has to come, to keep up with other changes. Since 1987, the domestic banking scene has changed drastically. The wilting influence of American banks and the emerging Japanese force have tilted the balance.
Domestic banks that used to keep a minimal amount of manpower in their dealing rooms are spending more resources on building the room up. Inter-bank poaching on dealing room staff has become commonplace.
