yiu - kwan choi : launch of the cmu bond price bulletin remarks by mr yiu - kwan choi, deputy chief executive of the hong kong monetary authority, at the signing ceremony for the launch of cmu bond price bulletin, hong kong, 9 january 2006. * * * it gives me great pleasure to welcome you all to this signing ceremony for the launch of the cmu bond price bulletin. we are pleased to see the launch of the bulletin. this, we believe, will be a useful tool to help promote the retail bond market in hong kong. as you know, financial infrastructure development has always been a priority item on the hkma's policy agenda. a robust financial infrastructure is important in maintaining the stability and integrity of the monetary and financial systems and in strengthening hong kong's status as an international financial centre. over the years, we are proud that, with the support of banks and other financial institutions, the hkma has built a sophisticated financial infrastructure that meets the best international standards. having said that, we are conscious that there is always scope to further strengthen our financial infrastructure to take account of the latest technology and market developments. it was precisely for this reason that the hkma conducted a comprehensive review last year on financial infrastructure development in hong kong. the launch of the bulletin is one of the recommendations arising from this review. the objective is to provide retail investors with convenient on - line access to information on bond products and bond prices. we believe that the launch of the bulletin will help to raise product awareness and improve price transparency, thereby helping to promote the development of the retail bond market in hong kong. the bulletin is developed by the central moneymarkets unit of the hkma. we are delighted to have eight major banks, which are present here today, to be the price providers. thanks to their support, indicative bid / offer prices of over 200 bonds of different currencies issued by both public and private sector entities will be available on bulletin. investors may access the bulletin later today for bond information. the website address is https : / / www. cmu. org. hk. the bulletin also provides direct hyperlinks to the price providersa€™ websites to facilitate investors to approach the price providers for trading. relevant transaction charges imposed by individual price providers are also posted on the bulletin. retail investors can easily gain access to, and conclude trades with, the price providers in a convenient, secure and efficient manner. we are thankful to banks and potential users for

rmb, in our settlement platform, if that is considered appropriate, could be as little as six months. if this strategy is successful, it is not difficult to envisage an increasing proportion of the balance sheet of the banking system denominated in foreign currencies, and the greater use of, say, the us dollar in both the equity and debt markets. i am not sure if this is a dimension covered in professor genberg's paper on endogenous dollarisation, but it is of particular relevance to hong kong. the third paper, to be presented by professor kumhof, deals with issues regarding price dynamics. professor kumhof's paper focuses on pricing policies and inflation inertia, at a time when we are experiencing deflation in hong kong : i am sure, however, that there are insights that we can derive from the paper and the discussion. research on price formation is high on the agenda of the hkimr and the hkma, and possibly in academic and other organisations active in economic research in hong kong. we have had deflation for some five years now and we are still debating the relative importance of cyclical and structural factors behind that deflation. there is also debate on whether measures could and should be taken to limit the damaging effects of deflation, notwithstanding the fact that hong kong is a highly externally oriented economy. views on price dynamics will contribute to these debates. as you know, the hkimr was established by the hkma. this reflects the importance we attach to thorough analysis of monetary and financial issues that hong kong is facing. developments in the local, regional and global economies provide many opportunities for hong kong, but also serve as potential sources of risks. it is therefore critical that we actively seek to understand these developments. to promote economic research of the highest quality, it is essential that the research activities of the hkimr are, and are seen to be, carried out freely, without interference from interested parties, including the hkma. it is therefore not desirable for the hkma to exercise control of the hkimr's day - to - day activities. but, of course, the professional quality and academic integrity of its activities need to be monitored and ensured. for this reason, a council of advisors, whose members are all distinguished economists working in and outside of hong kong, has been established. many of them are in fact here today. the role of the council is to ensure the quality of the hk