to make it attractive for private equity funds to domicile in hong kong. the objective of this project is simple : to strengthen hong kong ’ s leading position as a private equity fund hub in asia. 8. market development is a never ending race. it is not enough for us to be making good progress and improvements every now and then. we must be able to improve and move faster than our peers if we wish to stay ahead of the game. 9. now that i am talking about ‘ brand ’, it should be no surprise to you if i now return to the theme of my first choice, “ culture and ethics ”. just like any luxury goods, a brand in the context of ifc entails quality and credibility. quality requires technical competence in a wide range of financial services, such as fx, interest rate, credit, hedging, derivatives, ecm, dcm, asset management, private equity, etc. i think hong kong is in a good position in all these markets. we have done rather well in all these markets and should be able to further deepen and broaden them given the exceptional opportunities emerging from the internationalisation of rmb and the latest belt and road initiative. however, i am less sanguine when it comes to the credibility component, which boils down to trust. trust has to be earned over a long period of time, and can be lost overnight. 2 / 4 bis central bankers'speeches for hong kong to excel, it is not enough for our financial institutions and practitioners to be technically competent only. they must also uphold high ethical standards in order to gain the trust and respect of customers. 10. in the past few years, a number of misdeeds by some financial institutions and practitioners have come to light. for example, the rigging of libor had led to international reform of interest rate benchmarks, a process which is still ongoing. there were also cases of front running and other irregularities in fx and gold trading that had led to investigation into some banks and senior bankers. all these point to the weakness of the tradition of “ self - discipline ” amongst financial practitioners. it is now considered that more comprehensive and possibly more prescriptive guidelines on ethical standards and conduct are needed to strengthen the system. the latest fx global code is the outcome of one of such reforms. the code was developed over the past two years by 16 central banks, including the hkma, together with private - sector institutions from both the buy

they were before the crisis. competitive pressures will be further intensified on the funding side when we deregulate current and savings accounts next year. this is due to take place at the end of june 2001, and will only be postponed if the prevailing economic and financial conditions are clearly unfavourable, which we do not expect to be the case. the banks therefore need to prepare for the pressure on margins that this will cause and to be able to quickly introduce new deposit products like interest bearing current accounts. if they do not do so, their competitors will. how do the local banks need to respond to these challenges? most obviously, the challenges raise the issue of consolidation of the banking sector, through either merger or take - over. this is the trend we have seen happen in other financial centres, including in japan. it has been slow to take off here, but it is going to come, sooner rather than later, as competition gathers pace. events such as the sale of the chase retail banking business, the restructuring of the bank of china group and the renewed interest of some foreign banks in acquiring an increased presence in hong kong will help to alter the competitive balance and could act as catalysts for change. banks also need to respond by properly harnessing the power of new technology, including the internet, to bring down costs and increase their ability to cross - sell a wider range of products. they may find it easier to finance the necessary investment, and obtain the skills and human resources they need, as part of larger units - which is a further argument in favour of consolidation. finally, i strongly believe that banks in hong kong and elsewhere must become more aware of, and responsive to, consumer needs. this not only means supplying the products that customers want but also providing them with easy to understand information about the terms and conditions of these products, including the fees and charges that attach to them. hong kong banks have not been sufficiently transparent in this respect, as a recent consumer council report on credit card charges has demonstrated. this is something that we will be aiming to put right in the current review of the code of banking practice. what does this mean for the hong kong monetary authority? clearly, we also have to upgrade our own skills and methods in our role as banking regulator to try to ensure that we can keep up with developments in the market. this is most obviously the case with the new technology that requires us to devise new policies on innovations like virtual banking and internet security. this means that