Our main objective is to entrust several strategic credit bureaus with the imperative to aggregate information on aggregate debt payments. These offices will be subject to greater regulation, primarily concerning data protection. If the market cannot come to an agreement, we will have to take an alternative route and create a single integrator. Furthermore, we plan to eliminate certain issues with regulation. These include the collection of credit histories in cases of securitisation, license revocation or bank resolution. Furthermore, in recent years financial regulation has been advanced by adding further objectives that are completed using this regulation. Therefore, alongside the main objective of ensuring the stability of individual banks and financial institutions, ensuring financial stability now falls within the remit. In our opinion, there is currently room for one more addition. Let me explain. The aim of financial regulation has conventionally been seen solely as risk limitation. Attempts to put in place differentiated regulation that would curtail one area of business but stimulate other, higher-priority ones, have always been met with outcry. But proportional regulation, for example, which we started to develop, stimulates small business lending. This was one of the goals for its introduction. Another example: the discouragement of unsecured consumer lending forced banks to cultivate mortgage lending, among other things. For example, a large share of bank lending is currently used for mergers and acquisitions. This creates risks for banks, is unlikely to significantly benefit the country, does not create additional gross product or new jobs, and simply facilitates the redistribution of property.

We are of course not yet in a position to observe the actual outcome; there may, as last year, be surprises in store. My examples have been based on 12month HIBOR; there may, of course, be benchmarks higher or lower than this reference point which are more relevant to individual decisions. I hope that I have succeeded in demonstrating that the measurement of real interest rates is rather more complex than may appear at first sight, and is dependent also on the context. If you were to look at only the popular measure of the real rate - the nominal rate deflated by a measure of past inflation - then the recovery in asset prices in Hong Kong over recent months would seem inexplicable, because real rates would have appeared so high. The recovery in asset prices would, however, be consistent with a reduction in perceived real rates - which is in fact what I am suggesting has occurred, on a fairly significant scale, as expectations of inflation have probably become positive while headline recorded inflation remains negative. For those who see some downside in all of this from the implication in the consensus forecasts that general inflation is now expected to resume, it is worth noting that the forecast magnitude is only very modest. I would not pretend that every piece of evidence unequivocally supports my thesis today. For instance, the continuing lethargy of bank lending to business in Hong Kong might suggest that high real interest rates remain a deterrent to borrowing and investment.