norman t l chan : remarks at the hong kong academy of finance inauguration ceremony and fellowship conferment welcome remarks by mr norman t l chan, chief executive of the hong kong monetary authority, at the hong kong academy of finance inauguration ceremony cum fellowship conferment, hong kong, 26 june 2019. * * * the honourable paul chan, distinguished guests, ladies and gentlemen, 1. a very warm welcome to all of you for joining us today to witness the inauguration ceremony cum fellowship conferment of the hong kong academy of finance ( aof ). 2. i strongly believe that the most crucial factor that differentiates an international financial centre ( ifc ) from the other aspiring financial centres is its superior “ soft infrastructure ” or “ soft power ”. i am sure you will agree with me that the quality and professionalism of the people in the financial services industry are the building blocks for the “ soft infrastructure ” that determines the competitiveness of an ifc. the mission of the academy is to serve as a centre of excellence for developing financial leadership as well as a repository of knowledge in monetary and financial research, including applied research. 3. the aof will develop and run a leadership development programme to nurture financial leaders in hong kong. the academy will invite senior management and promising talents from financial institutions, regulators, professional firms and academia in the field of finance to join as members. aof members will be invited to participate in the leadership development programme through which they can interact with the academy ’ s international advisers, fellows and other top financial leaders through seminars, workshops and small group discussions. although the academy does not offer technical or professional training, which is well served by many tertiary institutions and professional bodies such as the hong kong institute of bankers, the hong kong securities and investment institute, the treasury markets association, we will collaborate closely with these institutions as our partners to achieve the maximum synergy in accomplishing our common goal of enhancing the soft power of hong kong. 4. on the research front, the hong kong institute for monetary research ( hkimr ), which was set up 20 years ago to undertake monetary and economic research, has become a subsidiary of the aof and will expand its ambit to cover applied finance research and thought leadership. the hkimr will continue to have its own board of directors and, in addition to the existing council of advisers for monetary research, a new council of advisers for applied research has been set up to oversee the applied research work of aof.

may differ in such circumstances, however, is the time profile of the appropriate policy actions best serving that objective and the degree of co - operation among central banks in coming to a common understanding of the situation in the case of an emergency. without doubt, central banks can make an important contribution to limiting the international economic consequences that an extreme event like the september terrorist attacks may entail. however, apart from the immediate tasks of central banks in terms of ensuring the continued functioning of markets and of payment systems, the main contribution of central banks remains what it always has been : the maintenance of price stability. confidence in the maintenance of price stability is the foundation for the effective functioning of a market economy. fostering trust and confidence in lasting price stability become not less but more important in the wake of extreme events and in the presence of unusual uncertainty. this remains the best contribution that monetary policy can make to securing a solid basis for growth and “ domestic ” as well as international stability. asking monetary policy to do more or to serve other purposes, risks creating illusions about what monetary policy can do. as it has been aptly put by the governor of the bank of england, sir eddie george, in a recent speech : " it is important that the limitations of monetary policy - what it can and what it can't hope to achieve - are clearly understood. otherwise expectations are likely to be disappointed, and disappointed expectations may lead to building pressure for alternative policy actions, which may not in the event be in our longer - term economic interest. " this view on what monetary policy can do - and more important what it cannot do - is basically shared by all major central banks. based on this " common understanding ", central banks are thus likely to come to very similar conclusions on the appropriate course of policy given the respective mandates and prevailing conditions in the respective economies. concerted actions should not come into conflict with the mandates and monetary policy strategies pursued by the participating central banks. otherwise co - operation could lead to increased uncertainty about the future course of policy and compromise longer - term stability. this lesson also seems to stem from historical experience. on the whole, since the end of bretton woods efforts at policy co - ordination have been confined to addressing specific unusual circumstances such as severe currency misalignments. conclusion in concluding and summing up my remarks, i strongly believe that the best contribution that a large economy like the euro area can make to the international financial system is to ensure macroeconomic stability " at home " by