Increased transparency among Hong Kong foreign and local banks will be a determining factor in generating new business, according to global advisory service provider KPMG. KPMG principal Babak Nikzad said transparency had become an issue in the past 18 months because of the Asian crisis. 'It has become a buzzword because Hong Kong is the region's financial centre, and all the banks are here covering Asia,' he said. On December 1 the Hong Kong Monetary Authority (HKMA) issued its Disclosure Package, recommending large foreign bank branches disclose their financial information to the public. The HKMA hoped to bridge the transparency gap between locally incorporated authorised institutions and foreign bank branches. Mr Nikzad said given what had happened in Asia the money was now chasing good investment and to make a good investment you needed good information. 'If I was sitting in the chairman's seat, I would want to be giving as much quality and timely information as possible,' he said. 'At the end of the day you will weed out bad loans and make the whole of the investing community better and eventually bad investments will go away.' Mr Nikzad said there were some foreign bank branches that were not too keen to show information about local operations but not because they didn't want to be transparent. He said foreign banks were concerned that a branch with a bad-debt problem in Hong Kong would not be viewed in a group context. 'If you have a huge bad-debt problem in Hong Kong does it mean your bank is broke? If you put it into a group context then it is a drop in the ocean,' he said. KPMG financial business unit senior manager Rosanna Wong Suk-yee said increased transparency would provide its own benefits as bank runs in recent years may not have happened if there had been more transparency. Ms Wong said many Hong Kong bank runs had been rumour-based. 'The fact that there were no bank runs last year shows that the greater transparency of the banks has helped to calm down and dispel the rumours,' she said. Mr Nikzad said transparency in the region had become International Monetary Fund-driven, as it wanted to know exactly where its money was going.