alan bollard : dealing with debt speech by dr alan bollard, governor of the reserve bank of new zealand, and mr michael reddell, to the employers and manufacturers association, auckland, 6 august 2012. * * * introduction households, firms, and governments across much of the advanced world have taken on very large amounts of debt in the last couple of decades. in new zealand, for example, the private sector owes three times what it did in 1998. people and governments are now living with the aftermath ; dealing with the debt. many individual lives will have been irreversibly changed. even at an aggregate economy level, it looks as though we could be dealing with the aftermath for quite some time yet. this speech offers some perspectives on what the accumulation of debt means for people, and for our economies. inevitably some of the material will have quite a provisional flavour : how things will play out remains uncertain, and is being intensely debated by academic researchers and policymakers alike. it matters to us all. some context debt is not new. in his recent book, debt : the first 5000 years, the american sociologist david graeber demonstrates the central role that credit has played in economic and social life stretching back millennia. but some things are newer : for example, the scale and pervasiveness of the public and private debt, the scale of cross - border gross and net debt, and the central role that highly - leveraged financial institutions and wholesale financial markets play in making that debt possible. and what is particularly striking in the last few decades has been the rate at which debt has increased ( relative to income ). if debt is not new, neither is it a bad thing. debt gives borrowers and savers alike additional options. the ability to lend and borrow is an important part of what enables us to enjoy the sort of life we do. to see the point, one has only to try to imagine a world without debt – a world in which entrepreneurs could not borrow to develop fast - growing firms, and where home ownership was restricted to the rich and the over - 50s ( who had saved the full price of a house ). at a national level, the ability of one country ’ s citizens to borrow from those of another country means that regions that need a lot of new capital to develop ( think of the united states or new zealand in the late 19th century ) can borrow from those with a lot of savings ( think of the late 19th century united kingdom )

joseph yam : developing and positioning hong kong ’ s bond market speech by mr joseph yam, chief executive of the hong kong monetary authority, at the forum on china ’ s government securities market in the new century, hong kong, 19 november 2001. * * * introduction it is a great pleasure for me to be here today to share with you hong kong ’ s experience in the development of the bond market and our views on the future prospects of that market. before i go into the subject, however, i would like to congratulate our friends from the mainland on their superb efforts leading to china ’ s accession to the world trade organisation. the signing of the necessary documents a week or so ago marks the successful conclusion of 15 years of sheer hard work and determination, and the beginning of a new era in which the mainland embraces globalisation in earnest, to the long - term benefit of china, the region and the world. i have no doubt that hong kong, in particular, will benefit tremendously from this. the international business community has been positioning itself, here in hong kong a free and open economy at the doorstep of the mainland and an integral part of china to take advantage of the many opportunities that will open up in the years to come. as the international financial centre of china, hong kong is particularly looking forward to the opportunities arising from a much quicker pace of financial liberalisation in the mainland after accession to wto. put simply, notwithstanding the gloom of global recession, the future of hong kong is bright. bond market development let me turn quickly now to bond market development. there are a few points that i would like to make immediately. the first point is a basic and obvious one, so obvious that it is often overlooked. this is that the bond market is a channel of financial intermediation for the purpose of mobilising savings into productive investment that promotes economic growth and development. there is a need for those involved in the bond market those responsible for its development and those making a profit or a living from it to be frequently reminded of this basic purpose. this is particularly so when considering the introduction of sophisticated products derivatives and the like. i have nothing against sophisticated financial engineering, or against the engineers being well remunerated, provided that the regulators and the market participants, both at the wholesale and retail levels, are capable of appreciating and coping with the associated risks. this may not often be the case. it is possible that, while these products theoretically