The Monetary Authority may set up an independent commission to monitor its performance and pay rises for executives in response to growing political pressure for greater accountability.
But it has insisted that legislators should not be appointed to the commission for fear of political intervention. The commission would be made up of academics, accountants and lawyers.
The authority, which is the territory's de facto central bank overseeing a $1,000 billion Exchange Fund, has long been criticised as an independent kingdom. A recent dispute with the Legislative Council over its spending of $3.7 billion on a permanent office, without members' approval, has fuelled calls for more checks and balances.
Under the proposal, there would be an 'understanding' with the Government spelling out the powers and responsibilities of the authority. A senior authority source said the memorandum of understanding would help fend off political interference from government officials and lawmakers.
Assessment of pay rises and performance appraisals, now handled by the Exchange Fund Advisory Committee, would be transferred to the proposed independent commission.
The source said the advisory committee, which consists of banking representatives, might be seen as having a conflict of interest in deciding pay rates for the authority, which regulates the banks.