, business cycles are typically relatively short - lived affairs : for instance, the average duration of business cycles in the uk and us economy in the post - war period has been estimated at 5 ½ years. 5 however, though financial cycles build up much more slowly than business cycles, the amplitude – the swings between the peaks and troughs – is greater. in the uk the peak - totrough variation in credit has been around 40 percentage points on average for financial cycles, whereas the average peak to trough change in gdp in the business cycle has been around 10 percentage points. financial cycles do not always mirror or drive business cycles. to a headline writer, the fact that credit grew twice as fast as gdp for 10 years before 2007 and that household debt rose from levels of around 100 % of household income in 1997 to 155 % shouts “ unsustainable, debt financed growth ”. but over those 10 years, the economy was not obviously growing at abovenormal rates and inflation remained subdued, albeit aided perhaps by the favourable terms of trade shock that followed china ’ s admission to the world trade organisation in 2001. 6 while the increase in debt may have had some impact on growth, the uk certainly did not appear to enjoy a credit financed boom. so one very important lesson in this is that traditional indicators of the business cycle cannot be relied upon to flash warning lights about vulnerabilities building up in the financial system. where did the money go? if the total amount of uk private credit in the economy rose sharply in the 10 years before the crisis without much impact on private sector demand or the economy as a whole, where did the money go? some went to business – around a third, much of it to commercial real estate. but the bulk, around two - thirds of the credit, was to households ( chart 3 ). bank lending to households made a particularly large contribution to credit growth in the first half of the 2000s. and while unsecured lending grew strongly over the period, it only comprised about 10 – 15 % of lending to households. the much larger part was, of course, secured lending for housing. and it is fair to call it a boom. secured household debt relative to annual household income was stable at around 70 % for much of the 1990s, before rising rapidly to over 110 % by 2007. the stock of household debt secured on housing went in real terms from around £300 billion to £700 billion. the main driver of course was the increase in house prices

anselmo l s teng : industrial transfer and financial services viewed from the perspective of macao keynote speech by mr anselmo l s teng, chairman of the monetary authority of macao, at the 5th pan pearl river delta regional cooperation and development forum, nanning, 14 august 2009. * * * honourable heads of delegation, dear delegates, ladies and gentlemen, good day! i would like to express gratitude to the host and mr. ma jing, president of the people ’ s bank of china guangzhou branch who have given me an opportunity to communicate with you over how we can make use of the opportunity provided by industrial transfer to promote the development of financial services. at the same time, i would like to make use of the opportunity to greet the financial practitioners from other provinces who attend this meeting and hope that we can enhance our link with a view to fulfilling our common target of achieving regional development. industrial transfer is a relocation of assets for more profitable results. through more effective combination with other production factors, a higher economic growth can be achieved. in general, industrial transfer can be realized via different forms, such as partnership, mergers, re - organization, cooperation and capital pooling. in the process of transfer and acceptance, it will involve a financial platform to facilitate initiation of investment, finance, merger and acquisition which will certainly give rise to a demand for financial services and enhancement of financial efficiency. the demand needs to be satisfied through innovation of financial products and services, business channels and management expertise which financial institutions are expected to provide. the whole process can strengthen the foundation of the financial institution, reinforce its competitiveness and resistance against risks, which to a certain extent enhances the safety and stability of the financial system as a whole. industrial transfer obviously triggers demand and development of financial services. yet, the success of an industrial transfer depends on the result of a series of interactions and related promotions, which may involve financial elements and non - financial elements, such as the incentive, guidance or encouragement arising from government policy relating to industrial transfer. market demand cannot be neglected. the impact on local inhabitants and environment, the economic gains before the enterprise, the capability of the region to accommodate the transfer should be considered. this will include accessory industries and professional services, local financial services including investment and credit services which the newly relocated industry badly needs. so much the better if a bank which treasures its clients will set up a branch in that location to provide tailor - made financial services. now, i would like