joseph yam : the case for an asian bond market opening address by mr joseph yam, chief executive of the hong kong monetary authority, at the asia - pacific bond market congress : a new maturity, hong kong, 8 - 9 july 2004. * * * i am honoured to be invited to give the opening address at this congress. the strong attendance at this event, and the quality of the sessions lined up, are, i think, an indication of the growing recognition of the importance of bond market development in this region. i am delighted that hong kong has been chosen for the venue. the congress is well timed, since only yesterday the hong kong sar government launched its hk $ 20 billion bond issue. i extend a warm welcome to those of you who are visiting hong kong : i hope you will be able to stay on for a few days and enjoy the city over the weekend. the title of the congress “ a new maturity ”, apart from the mild and allowable pun, makes a useful comment on the state of the bond market in asia. whether “ maturity ” is quite the right word is a matter of debate, and i note that the title of the panel discussion later this morning adds a question mark to the word. however we might describe it, there is no doubt about the progress that has been made in the growth of domestic bond markets in the region over the past few years. market capitalisation of domestic bond markets more than doubled over the past nine years - from an average of 20 % of combined gdp in 1995 to 47 % in 2003. during the same period, the combined share of bond markets in total financing grew from 11 % to 19 %. bond markets are, therefore, a growth industry. quite apart from the considerable initiatives by the private sector, bond market development has been a particular target of initiatives by governments and multilateral agencies. there are good reasons for this. my intention in this short address is to set out briefly these reasons - to put the case for an asian bond market - and then to examine some of the work that is in progress in this field, particularly from the point of view of the central banks. the need for an asian bond market the underdeveloped state of the asian bond market - compared with the bond markets in the industrialised economies - has been well documented in recent years. despite the impressive growth of the size of the asian bond market that i have just mentioned, it still lags behind the developed economies in terms of breadth

few days, the swiss interbank clearing system sic will celebrate its 20th anniversary. in 1987, the introduction of the sic payment system represented a revolution for swiss payment transactions. sic was one of the first payment systems in the world of the type known as real time gross settlement ( rtgs ). before the introduction of sic, payments in switzerland were first offset against each other through a system of eight clearing houses. the net positions were then settled through the banks ’ sight deposits at the snb. this system was extremely cumbersome, costly and fraught with large credit and systemic risks. in sic by contrast, all payments are settled individually and directly via sight deposits at the snb. thus, the payments are final and irrevocable – just like cash payments. sic is extremely efficient and has drastically reduced credit and systemic risks. it is one of the most secure and cost - effective systems in the world. nowadays, sic forms the backbone of switzerland ’ s payment system. not only interbank payment transactions, but also payment transactions between postfinance and banks as well as cashless retail payment transactions are essentially carried out via sic. in addition, the international foreign currency settlement system, continuous linked settlement ( cls ), is linked to sic. sic, together with the trading platforms of swx / eurex and the securities settlement system secom of sis, forms the swiss value chain, switzerland ’ s integrated financial market infrastructure. the sic payment system is of utmost importance for financial stability and the implementation of the snb ’ s monetary policy. our monetary policy instruments are tailored to the palette of integrated sic functions within the framework of the swiss value chain. initially, the sic turnover in terms of value amounted to chf 100 billion per working day ; it currently stands at chf 180 billion. the number of transactions, however, has increased far more markedly. one year after the sic launch, approximately 130, 000 transactions were processed each day. now, twenty years later, an average of 1. 3 billion – i. e. ten times more – transactions are carried out per working day. the growth trend for sic looks set to continue its upward path. the rise in turnover and transactions depends largely on economic growth, technical innovations in payment instruments and developments in the swiss financial centre. the snb has partially outsourced its sic operations. sic ag, a telekurs group company, is responsible for technical operations and for further development of the system. the snb steer