global financial system more robust and resilient. large banks are stronger, more liquid, less leveraged. derivative markets are safer, with central clearing covering more than 90 % of otc derivatives trades in the major jurisdictions. yet, from another perspective, the risk of financial instability is not small. this is mainly due to the build - up of leverage in recent years. in the g7 economies, the ratio of government debt to gdp has increased by 45 percentage points since the crisis and is now at its highest since world war ii. 5 / 7 bis central bankers'speeches in emerging asia, corporate debt issuance has ramped up to about us $ 200 billion p. a. since 2014, three times the average volume in the preceding five years. household debt has built up sharply in many advanced as well as emerging market economies, with escalating house prices a key driver. high leverage is a risk factor for financial instability. i spoke earlier about how an increase in interest rates in a high leverage environment can create debt servicing pressures. if these pressures lead to widespread credit defaults, financial instability is usually not far off. another channel of causation from high leverage to financial instability is through sharp corrections in asset prices, particularly real estate prices. the financial stability risks in the us and china warrant close monitoring, simply given the size of their economies and financial markets, not to mention the build - up of leverage. in the us, financial stresses are most apparent in the credit markets. corporate debt has increased by 30 % since the crisis, and much of the funds raised has gone into stock buybacks or to highly leveraged corporates. the institute of international finance estimates that about 8 % of us firms ( by assets ) are unable to cover their annual interest payments. unanticipated increases in lending rates or a slowdown in earnings growth could tip these vulnerable firms into bankruptcy. in china, the bank for international settlements has estimated total leverage in the system has reached nearly 260 % of gdp in 2017. the risk is of a hard landing in the overheated chinese property market, which has been fuelled by rapid lending by trust companies and asset managers. chinese authorities have made reducing systemic financial risks a key priority but have to tread very carefully to avoid destabilising the financial system in the process. conclusion let me conclude. there are good reasons to be optimistic about growth in 2018. the goldilocks scenario – at least for this year – is a reasonable baseline

stay committed and work together collectively, with our focus remain firmly on the common goal of ensuring a smooth and timely transition. 21. given the limited amount of time today, i could only briefly touch on what the hkma has been and will be doing for being the region ’ s sustainable financing hub. i look forward to sharing more updates and views with you on other occasions. i would also urge you to stay engaged for further benefitting from the unfolding opportunities in the sustainable financing space in hong kong! thank you. 1 hkma analysis of the volumes of asian international green and sustainable bonds arranged in hong kong 4 / 4 bis central bankers'speeches