Joseph Yam: Establishment of the Treasury Markets Association
Welcoming remarks by Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the
inaugural ceremony of the Treasury Market Association, Hong Kong, 23 January 2006.
* * *
Good afternoon, Ladies and Gentlemen,
1. First of all, let me, as President of the Council of the Treasury Markets Association, welcome you all
to this inauguration ceremony to celebrate the establishment of the Treasury Markets Association. The
establishment of the TMA has the strong support of market participants. I am glad to learn that the
Association has already successfully registered about 2,000 market practitioners and over 50
institutions as members. This strong membership provides a solid base for the Association to take
forward its strategy and plans.
2. To maintain the status of Hong Kong as an international financial centre, a requirement specified in
Article 109 of the Basic Law, I believe that it is important for us to have, among other things, treasury
markets that are active, professional and efficient, and that operate in accordance with international
standards. The volume of financial business in Hong Kong is enormous. This is best illustrated by the
following statistics:
•
According to the Bank for International Settlement's triennial survey in 2004, our average daily
foreign exchange turnover was close to HK$800 billion, which was the sixth largest in the
world;
•
On average, transactions settled through the various RTGS systems in Hong Kong amounted
to HK$540 billion each day in 2005;
•
New debt securities issued in 2005 amounted to HK$400 billion; and The total amount of
funds raised through IPOs reached HK$166 billion in 2005.
3. Our treasury markets have done well in servicing the financial businesses behind these impressive
numbers. Further globalisation of financial markets and financial liberalisation on the Mainland will
likely place new and increasing demands on our treasury markets. We need to move with the times, if
we are to maintain our status as an international financial centre, and I think the establishment of the
TMA provides a good mechanism for us to do so. In my view, there are four key areas which the TMA
should focus on: professionalism, market development, codes and standards, and publicity.
4. The professionalism of market practitioners contribute significantly to the competitiveness of a
financial centre. An important area of work of the TMA is therefore to enhance the professionalism of
the practitioners in the Hong Kong treasury markets. I look forward to the development of a
professional qualification regime for treasury market practitioners and to a time when membership of
the TMA is seen as confirmation of professional expertise in the field. Credible training and continuous
professional development programmes, comparable to those of other professional bodies, will bring
the recognition that the treasury market business deserves as a distinct branch of the financial
industry.
5. The second area where the TMA will be active is market development. Treasury markets, like all
financial markets, are never static: they are vibrant and dynamic. To maintain our competitiveness, we
should proactively identify and respond to opportunities arising from this dynamism. And, looking
around us, it is not difficult to see that the Mainland is an important source of dynamism and
opportunities in the years to come. Hong Kong, with its location, mature and efficient markets, pool of
professional talent, as well as its many links to the Mainland, has a clear advantage in tapping this
huge potential market. One of the priorities of the TMA, therefore, is to establish a close relationship
with its counterparts and regulatory authorities on the Mainland, and to contribute to the development
of the treasury markets in the Mainland. I believe that this will provide enormous business
opportunities for market participants in Hong Kong and further strengthen our role as an international
financial centre.
6. The third important area of work for the TMA will be to develop and promulgate codes and
standards that are widely accepted by market participants, and in line with best international
practices, to help the treasury markets function smoothly. The TMA will continue the work of the TMF
in reviewing and developing codes and standards for the industry in the light of the development in the
local, Mainland and overseas markets. One example of work in this area is documentation in Chinese,
which will be essential as Hong Kong explores new business opportunities on the Mainland.
7. Lastly, for Hong Kong to aspire to be the preferred hub for treasury market businesses in the region,
we need to market ourselves well. The TMA will therefore have to pay attention to publicity and
communication, not just in Hong Kong but also in the region. It will be very important for the TMA in
the years ahead to raise its profile, and strengthen and broaden the ties previously established by the
TMF with counterparts in the major market centres around the world.
8. Establishment of the TMA allows a wide range of institutions and practitioners in the foreign
exchange, money markets, debt, derivatives and other treasury markets to pool their efforts towards a
common aim. While the TMA is newly established, I am glad to note that the financial institutions and
money brokers have already joined as institutional members. The majority of the ACIHK members
have also joined as individual members. This broad membership makes the TMA the authoritative
industry association and focal point for treasury matters in Hong Kong. I am also glad that there are
four committees established to focus on the four key areas that I have spoken about. We at the HKMA
consider the TMA an important new element of our financial infrastructure. We are confident that the
TMA will play a pivotal role in the maintenance of the status of Hong Kong as an international financial
centre. May I congratulate you all on today's inauguration a nd wish you all the very best for the future.