norman chan : welcome remarks - 2018 green and social bond principles annual conference welcome remarks by mr norman t l chan, chief executive of the hong kong monetary authority, at the 2018 green and social bond principles annual conference, hong kong, 14 june 2018. * * * financial secretary, martin, distinguished guests, ladies and gentlemen, 1. welcome to the 2018 green and social bond principles annual conference, co - organised by the hong kong monetary authority ( hkma ) and the international capital market association, supported by the hong kong financial services development council. 2. today ’ s conference is the flagship event in the world of green finance, and rightly so. since the publication of the green bond principles ( gbp ) in 2014, it has become the de facto global standard for green bond issuance. these days, a majority of the green bonds issued globally follow the gbp framework, and many major markets base their local green bond standards on the gbp. in this conference, we will have the opportunity to hear more about the latest enhancements to the gbp, and how green standards have been developing in different parts of the world. 3. today ’ s conference is notable also because of its location. as martin said, it is the first time that the conference is held in asia. looking at the turnout, it is a good choice. i am not just referring to over 900 registered attendees – this is clearly impressive. i am also referring to the geographical mix, with a large showing from asia, in addition to delegates from europe. this is a testament to the rapid growth of the green bond market in region. 4. indeed, over the past few years, the green bond market has grown exponentially, including the green bond market in hong kong, and we are very pleased about this development. for many years, the hkma has been working to promote the development of the hong kong bond market. today, hong kong is the third largest bond issuer in asia ex - japan, behind only the mainland of china and south korea. 5. the hkma plays more than just the promoter role in green finance. as many of you may know, the hkma is the investment manager of the exchange fund. with assets under management over usd500 billion at the end of last year, we are one of the world ’ s largest asset owners. the hkma has been very supportive of responsible investment, and has incorporated environmental, social and governance, or esg, principles into our investment

this is a difficult environment in which the japanese banks are embarking on their mergers. from my discussions with the banks concerned it is clear that they know what needs to be done in order to achieve the desired synergies and economies of scale. but it all depends on the quality of the implementation. unlike the case with some past japanese mergers, the banks will need to achieve full integration in their operations, technology, management and culture as quickly as possible, and jobs will have to be lost. there must be a much greater focus than in the past on return on capital and on the generation of shareholder value rather than on pursuit of size and market share for its own sake. this is something in which we all have an interest. it is important for the stability of the world financial system and for the economic development of the asian region that the banks of the world ’ s second largest economy are fully restored to health and can resume their major role in financial intermediation at home and abroad. i wish you therefore all the best in your efforts. as i mentioned earlier, the japanese banks have been and will remain an important part of the financial system in hong kong. they also of course have a similar role to play in relation to mainland china. i am aware that the japanese banks felt particularly disappointed and aggrieved at the collapse of gitic and the subsequent debt problems that afflicted other mainland window companies. i do not intend to go over the past history of this episode that is hopefully now coming to an end. but it is possible to see some good coming out of it if it helps, as i hope it will, to restore financial discipline within china. it has also served as a useful reminder to both domestic and foreign banks in hong kong not to engage in name lending and not to rely on implicit guarantees. while financial transparency among mainland companies is by no means perfect, lenders are now at least better equipped to identify those companies that have sound underlying businesses and good management. the long saga of gde is now drawing to a close. the banks have, i believe, managed to negotiate the best deal possible, and the last remaining step is for the banks to review and sign the detailed documentation to put the restructuring into effect. i understand that when the documentation is sent to the banks, they will have plenty to read. but i hope that they will try to do this as quickly as possible and that we can avoid any last minute problems and delays. there is unlikely to be