anselmo l s teng : macao ’ s financial sector – exhibiting steady development speech by mr anselmo l s teng, chairman of the monetary authority of macao, at the 2008 amcm spring cocktail reception, macao, 11 march 2008. * * * the honourable secretary for economy and finance, mr. francis tam, the honourable director of the economic affairs department of the liaison office of the central people ’ s government in the msar, mr. zhou zhikui, the honourable chairman of the macau association of banks, mr. ye yixin, the honourable president of the macau insurers ’ association, mr. si chi hok, the honourable president of the macau insurance agents and brokers association, mr. tou kam seng, the honourable president of the federation of macau professional insurance intermediaries, mr. frank ip, the honourable president of the macau financial markets association, mr. chan kam chun, the honourable president of the association of macau financial employees, mr. ng chi peng, distinguished guests, friends of media, dear colleagues, good afternoon, first of all allow me to give a warm welcome on behalf of the monetary authority of macao ( amcm ), to mr. francis tam, mr. zhou zhikui and the honoured guests who attend this cocktail reception. at the same time, i would like to express my gratitude for all the help and support you have rendered to amcm in the past year. only those who have survived the harsh winter appreciate the warmth of spring. after a severe winter which can happen only once in half a century, we gather gaily today when flowers bloom in the mellow march air. we look back and forward to celebrate the arrival of the year of the rat. 2007 is an eventful year. global economic growth has slowed down due to the reverberations arising from the subprime crisis originated in the us. at the same time, financial risk which has hidden under years of economic prosperity starts to take its toll. there is the bank run of a financial institution in the uk, heavy losses have been incurred by giant multi - national financial groups. all these fiascos have created shock and uncertainties in international financial markets. however, despite all these turmoils in the international financial environment, macao continues to enjoy a burgeoning economy. financial risk is under proper control while the financial sector exhibits steady development. we can attribute all these successes to the endeavour

supervise all authorized institutions by conducting on - site inspections, off - site surveillances and prudential meetings. in 2007, amcm issued “ guideline on management of country risks ” and “ determination of market risk adjusted capital adequacy ratio ” to be adopted by financial institutions which will no doubt enhance the stability of our financial system. in the domain of insurance supervision, we emphasized on the revision and perfection of related legislations. at the same time we strengthened our inspection efforts, bashed illegal insurance activities. in perfecting related legislations, we revised “ mandatory automobile civil liability insurance ” and “ mandatory labour civil liability insurance ”. simultaneously, we enhanced inspection of aml measures implemented by insurance institutions. in 2007, amcm carried out on - site inspections on insurance institutions operating in macao, accentuating our efforts in regulating the operation of our insurance market. we strive to maintain a stable exchange rate. in 2007, china achieved record high trade surplus. there was a hefty increase in exchange reserves. the yuan continued to appreciate against us dollar which gave rise to depreciation of the pataca against the yuan. it fueled the pressure on inflation in macao. against such a backdrop, amcm adhered to rules of currency board and link rate, maintained the relative stability of the pataca, which facilitated stable operation of the macao economy. amcm promotes actively cross border financial cooperation. in 2007, as usual, amcm participated in activities relating to financial cooperation with the mainland, our neighbouring regions, countries and international organizations and encouraged the financial industry of macao to communicate and cooperate with overseas entities. for instance, we promoted closer cooperation between our financial sector and portuguese speaking countries and actively participated in meetings with relevant international and regional organizations. we hosted related international activities and successfully hosted the ogbs 2007 annual general meeting. we advocated and deepened financial cooperation between macao and guangdong as well as between macao and shenzhen. we reinforced cooperation with various financial regulatory bodies with a view to effectively bashing illegal financial activities through execution of cross border supervision. we actively encouraged the enlargement of rmb business in macao, promoted further development of rmb business, propagate the circulation of pataca on the mainland, reinforced cross border settlement and cooperation in financial infrastructure and opened up the clearing system for hong kong dollar cheques. in retrospect, we are proud to say that 2007 was again a fruitful year for the macao financial sector. i would like