Ever wondered how HSBC Holdings, a small colonial bank in a city of six million people, became one of the world's biggest and most profitable players? After all, its top managers were neither radical innovators nor especially ambitious empire builders.

They did, however, come from one of the world's most favourable banking environments. To a great extent, Hong Kong is still a cartel-dominated market where deposit rates are fixed at weekly Friday meetings of all the banks and lending levels coalesce around an HSBC-prescribed level.