joseph yam : a new euro clearing system for hong kong remarks by mr joseph yam, chief executive of the hong kong monetary authority, at the signing ceremony for the appointment of standard chartered bank as settlement institution for the euro clearing system in hong kong, hong kong, 3 july 2002. * * * we live in a financial world where boundaries and barriers are progressively collapsing, whether as the result of conscious policy decisions in favour of liberalisation or because of the new vistas opened up by the onward march of information technology. thus, restrictions on providing or using services across geographic or political borders are on the decline. particular transactional services, such as quoting, dealing, confirming, settling, delivering, paying and safe - keeping, are increasingly footloose, in the sense that many of them can be readily accessed from remote locations. moreover, the development of interfaces between systems in different parts of the world provides scope for continuous 24 - hour real - time trading. at the same time, the regulatory framework is tending towards standardisation around the world, thereby reducing the potential for regulatory arbitrage between jurisdictions. as a result of these various developments, the marketplace in which we can operate is potentially ever larger, but at the same time the potential number of competitors is ever growing. against this background, financial centres must be nimble, competitive, efficient and safe, and alert to the changing world, if they are to thrive. one of the essentials is that they must offer an effective and robust financial infrastructure. such is our aim in hong kong. but this does not mean throwing money into each and every idea which comes along - therea€™s no point in constructing highways if no - one wants to drive down them. there must be a reasonable business case. on the other hand, no venture no gain. the opening up of a footpath may lead to the emergence of heavy traffic. thus we have been selective in the initiatives which we support and, although not every project may have been an unqualified success, examples such as our hkd rtgs system which we pioneered in the mid - 90s ; the cmu which provides such an excellent settlement and custody service for debt securities and which is being linked up with a growing number of overseas counterparties ; and the relatively recent usd clearing system ; all of these present a strong track record. we are here today to mark another milestone in this infrastructural development - in the field of clearing and payments. our usd

by the interest rates on new corporate and household loans, which in q3 moved close to the lowest levels recorded in the past months. better financing conditions are a result of monetary policy easing, lower country risk premium, increased competition and persistently low interest rates in the international money market. in nearly all of these segments we can recognise the importance of domestic factors – primarily of macroeconomic stability, which reflects well - coordinated monetary and fiscal policies. in such conditions, economic growth, accompanied with labour market recovery, contributes to the further increase in lending activity. in september, the y - o - y growth in total domestic loans accelerated to 7. 7 % excluding the effect of exchange rate changes. this credit growth was recorded against the background of continued efforts to resolve npls which led to their significant write - off and sale to non - banking sector entities, supporting the investment upswing and the acceleration of economic growth. chart 4 falling borrowing costs supported lending activity chart 3 interest rates on dinar loans are close to minimum ( annual level, in % ) ( at constant exchange rate as at 30 sept. 2014, y - o - y rates, in % ) 20. 6 16. 4 11. 9 10. 2 5. 05 7. 7 - 5 - 10 non - financial corporations - new business households - new business non - financial corporations - outstanding amounts households - outstanding amounts key policy rate source : nbs. - 15 total domestic loans total domestic loans * source : nbs. * excluding the effect of npl write - off and sale since early 2016. implementation of the npl resolution strategy continues to yield excellent results. in slightly more than three years since the adoption of the npl resolution strategy the amount of npls was slashed by over 67 %. at the same time, their share in total loans was cut by close to 16 pp, to 6. 4 % in september which is their lowest level since 2008 when the monitoring of this indicator of bank asset quality began. owing to the considerable drop in the npl ratio, high capital adequacy of banks and better access to smes financing, serbia made a significant progress in the international competitiveness list of the world economic forum for 2018, as judged by the financial system indicators. chart 6 high capitalisation of the banking sector chart 5 npl share fell to its lowest level ( in % ) ( gross principle, in rsd bn ) ( in % ) 22. 8 21. 9 21. 8 21. 4 21