must distinguish between different aspects of the situation – commercial, competitive and social. if, other things being equal, banks are to be pressed into assisting with the delivery of social policies, then the precise terms of that obligation, including responsibility for funding it, should be made clear – whether by law or in suitable agreements or codes. in hong kong, banking, in a rather narrow definition, is estimated to contribute about 7. 5 % to gross domestic product and about 3. 5 % to employment. despite the withdrawal of a number of individual banks, particularly japanese, from hong kong in the late 1990s, the share of banking in gdp appears to have remained roughly stable for a number of years now. however, the share in employment has declined somewhat of late – as has also been evident in, for example, the usa and uk over a slightly longer period. this implies that there have been significant productivity gains, including no doubt those arising from the process of consolidation, which has been evident among international banks with presences in hong kong for some time and has now been spreading to the local banks. permit me one further historical reflection, related partly to my earlier comment about attitudes towards banking. when i first studied economics, there was a respected body of literature which argued that productivity growth in manufacturing would always outstrip that in other sectors because manufacturing was more amenable to the application of new technologies and economies of scale. in services, output was regarded as too firmly dependent on the specific input of labour for there to be much scope for productivity gains. this reasoning even led some governments to adopt policies with a bias to promote manufacturing in the belief that this would be the route to more rapid overall growth, although this seemed to ignore the demand side – that the public would become saturated with goods and increasingly desire to consume services. i don't know whether any of the protagonists of that school of thought are still alive today. if they are, and even if they could still identify some services where productivity has not advanced very much ( hairdressers and taxis are among the usually quoted examples ), they would be astonished at the productivity growth which has been apparent in banking and certain other service sectors around the world in recent years, as a result of the forces of globalised competition and the opportunities presented by technological advances. it is clear, therefore, that banking and other financial services not only provide essential support to development but also make their own contribution to national income. i am often asked questions such as what is the

speeches 07 jun 2022 opening remarks at the alliance for green commercial banks cornerstone members memorandum of understanding signing ceremony eddie yue, chief executive, hong kong monetary authority distinguished guests and friends, 1. good afternoon. it is my great pleasure to join you to celebrate another milestone of the alliance for green commercial banks. today we are going to witness the signing of a memorandum of understanding that brings in five cornerstone members to the alliance, welcome the on - boarding of four global partners and a knowledge partner, and publish the alliance ’ s first thought leadership paper. 2. my special thanks to the ifc advisory team and the hkma market outreach team for their hard work and close collaboration that brings out the biggest common denominator among various stakeholders. i would also like to personally thank the cornerstone members and partners for their strong support and contribution throughout the engagement process. what we have achieved today is the product of collective efforts. 3. we at the hkma feel privileged to have partnered with the ifc in launching the asia chapter of the alliance for green commercial banks. this is an important joint commitment and undertaking to support financial institutions in asia on their journey to become leading green institutions 4. indeed asia has the largest need for climate finance among the geographical regions. it is estimated that 66 trillion usd of climate investment is required for the region in the coming three decades. this is equivalent to over half of the global investment needed to contain temperature rise by 1. 5°c1. 5. the public sector alone cannot meet the enormous financing needs. commercial banks can and do play a crucial part in fostering the green transition. they can do so by adopting clear strategies and targets to develop green finance products and services to support the transition of the real economy. 6. we fully recognise that commercial banks are at various stages of this green transformation, and there is much scope to create synergy among banks in the region. the alliance serves as a platform to foster this much needed public - private sector partnership. the ifc offers a deep pool of knowledge and expertise in climate finance across the globe. the hkma will leverage hong kong ’ s international financial centre status as a focal point to promote green banking in the region. 7. since its launch, the alliance has organised capacity building events on a wide array of green finance topics, including green bank transformation, green building, voluntary carbon markets, climate risk management and green capital markets. 8. today the alliance is taking another big step forward by enlarging our network of