Such an access could foster competition and innovation in the payment industry but would obviously multiply the risks of cyber-attacks. In addition, there is a need to strike the right balance between the requirement to adequately prevent and address the cyber threats and the need for financial players to implement solutions that are economically viable. For instance, implementing a dual contingency software may be an efficient answer to some cyber attacks but does not go without costs. Finally, cyber-security is also a global issue: for a more effective response, it is necessary to establish cooperation at an international level and across sectors, well beyond the financial sector. In that perspective, initiatives from the Financial Stability Oversight Council (FSOC) in the US to improve cooperation between sectors, particularly those dependent on the financial sector, such as the utilities or telecommunications sectors, or the establishment of European Network and Information Security Agency are much welcomed. II. Against that background, understanding the threats, organizing protection and prevention as well as the coordination of the private and public actions are prerequisites for effectively fighting cybercrime. The aim of today’s seminar is to reflect collectively on this and to share experience. The first important step is to understand why the financial sector is a popular target of hacker attacks. That’s one of the objectives of the first panel of distinguished speakers. They will attempt to answer such questions as: What are the factors making the financial sector a privileged target for cybercrime? How to identify and quantify cyber-attacks?

I should add that there are other initiatives being developed, with the aim of positioning the banking system of Hong Kong to take advantage of further financial liberalisation in the Mainland. I hope they can be agreed, announced and introduced soon. Short-term risks However, the generally good news in recent months should not blind us to the problems that remain in our economy or to the risks that face us. While the economy has been recovering strongly, it has not been creating as many jobs as we all would like to see. It is also uncertain to what extent the budget deficit will be reduced, as government revenues recover along with the economy. To be sure, the difficult investment environment is not helping us in our attempt to meet the budgeted investment income for the fiscal reserves. Disappointments on these fronts may affect market sentiment in the short term, although the determination and ability on the part HKSAR government in tackling the remaining, structural components of these problems should not be in doubt. Furthermore, there is a risk that our financial markets could over-react to external developments, notably stronger than expected monetary tightening in the US, macro-economic adjustments in the Mainland and sharp increases in oil prices. Although it is unlikely that these external factors would derail our economy, and so this risk seems small, under extreme market conditions, short-term volatility in financial markets could have a bearing on monetary and financial stability in Hong Kong.