enjoys solid growth with low inflation, a sound fiscal position and a competitive financial system. financial markets are booming. although some were anxious about the possible outcome of handover to china ten years ago, fortunately, this anxiety proved unfounded. looking ahead hong kong seems to make constant efforts toward a more prosperous future, and seems never to be tempted towards complacency. a good example would be the fostering of renminbi - related financial business through issuances of renminbi bonds in hong kong, while maintaining a currency peg to the u. s. dollar. hong kong is blessed with an enviable geographic advantage, being located in the centre of a rapidly - growing asia. hong kong is also rich in the most important production factor for any industry, namely talented human resources like all of you here at this reception. this is, i believe an indispensable strength of hong kong. how hong kong develops further as an international financial centre is of enormous interest to everyone. finally, i thank again all our guests for your friendship and co - operation. recently, everyone in the asian financial markets is talking about the " unwinding " of the so - called yen carry trades. however, there will definitely be no " unwinding " of the 50 - year - long good relationship between hong kong and the bank of japan. i am fully convinced the co - operation and mutual trust between us will accumulate further. thank you.

, borrowing from financial institutions allows a firm to invest more in r & d and capacity expansion than would be possible using only its cash reserves. housing loans and credit cards enable households to consume and invest more than the amount of cash at hand. savings in a bank account generate interest income. access to financial services such as these leads to more efficient business development and active consumption, thereby promoting overall economic growth of the country. financial inclusion would also enhance the effectiveness of monetary and fiscal policy. regarding monetary policy, as most of the interest rates of borrowings and savings by firms and individuals are based on policy rates, central banks can affect their behavior by changing policy rates. this would improve the effectiveness of monetary policy and help smooth the economic cycle in the long run. enhanced access to financial services would also increase the effectiveness of fiscal policy. for example, ensuring a means to transfer money to every individual would allow policy makers to design subsidization programs that are targeted at a specific segment of society. this would make possible a finer - tuned redistribution policy. in addition, tax collection would become more effective. in advancing financial inclusion, it is necessary to develop both " hard " and " soft " infrastructures. hard infrastructures typically include telecommunications, such as the internet and mobile phones. soft infrastructure includes for example the active use of fintech, which, in addition to improving financial literacy, would be effective in broadening the range of financial services available. in the short run, the introduction of state - of - the - art asli demirguc - kunt et al., " the global findex database 2017 : measuring financial inclusion and fintech revolution, " world bank group ( 2018 ). 2 for example, see : thorsten beck, asli demirguc - kunt, and ross levine, " finance, inequality and the poor, " journal of economic growth, vol. 12 ( 1 ), pp. 27 - 49 ( 2007 ). fintech might lead to so - called leapfrogging. this refers to the phenomenon where the convenience of services is drastically enhanced by taking advantage of new technologies even before services based on older technologies have become entrenched. for example, mobile payments spread rapidly in china in just a few years. providing payment services via mobile phone does not require conventional physical infrastructure such as branch and atm networks that were considered indispensable in providing broad access to financial services. china not only enjoys improved access to banking services but has also saved on