eddie yue : financial markets in asia - turning challenges into opportunities speech by mr eddie yue, deputy chief executive of the hong kong monetary authority, at the international swaps and derivatives association ( isda ) 34th annual general meeting, hong kong, 10 april 2019. * * * thank you for inviting me to speak at the isda annual general meeting. for those of you coming from overseas, let me welcome you to hong kong and the very dynamic asian region. by now, i hope you have experienced and enjoyed the vibrancy of the city. indeed, this same vibrancy runs through asia, which has got strong economic momentum with a promising outlook. but as central bankers, our job is to be on the lookout for future challenges and how to overcome them. so today i ’ d like to start by outlining two near - term risks on my radar screen, and then discuss two longer - term challenges for asia. i would then offer some thoughts on how financial sector developments, including a lot of the efforts that isda has been involved in, can help overcome these challenges. challenges for the asian economies asia has seen remarkable economic growth over the past several decades – its gdp, on a purchasing power - adjusted basis, now accounts for more than 44 percent of global output, up from just 30 percent in year 2000. living standards have improved dramatically, and per capital income has more than tripled over this period. behind this incredible economic momentum are globalisation, investments, and supportive government policies, factors expected to continue to drive the region for the foreseeable future. indeed, the asian region is expected to grow at 5 percent per year through 2023, easily topping all other regions of the world. robust regional economic development has benefitted hong kong, just as the services we provide as an international financial centre has benefitted the region. hong kong offers an excellent platform for global businesses and investors, governed by a well - established legal system, backed by a resilient banking sector, and supported by its geographic and cultural proximity to china. our city has become a global leader in ipo fundraising, bond issuance, asset management, and renminbi products. in addition, innovation – both financial and technological – is a key policy priority and is at the heart of the city ’ s future plans. but underlying this promising trend for asia is a number of challenges. the most important downside risk to our region at this juncture is the china - us trade war. some negative

banks, thereby enhancing banks ’ lending capacity. the above would set in motion a virtuous circle for the economy and the banking system and create the necessary conditions for investment financing and a return to sustainable growth. if consolidating confidence is a sine qua non for the above, i. e. for the increase of both domestic and total investment, greece must also take full advantage of the possibilities arising from eu and euro area membership to create a financial safety net that would convince of its ability to cope with any headwinds that could make its financing costs unsustainable, in particular in an international environment rife with financial and geopolitical challenges. ladies and gentlemen, today, greece faces the historic challenge of returning to normality and to a path of convergence with its european partners. a return to strong and sustainable growth calls for maintaining and implementing the structural reforms already legislated, as well as further crucial reforms in areas that are still lagging behind, such as the tax system, public administration, the judicial system, the link between production, research and education, the legislative and regulatory framework, especially as regards the use of land, and the goods and services markets. it is obvious that only on this condition can greece once again become a friendly place for doing business, effectively support productive investment and make a successful leap in total factor productivity. in closing, i would like to underline that, in the long run, increasing investment require an increase in private sector saving ( by households and non - financial corporations ), which, as i pointed out earlier, has declined dramatically, dropping by 11. 5 percentage points as a ratio of gdp, in ten years. the fall in saving was particularly sharp in the years 2015 – 2016, for households and businesses alike. admittedly, the capital controls combined with higher taxation led households and businesses to tap their savings, in order to meet their current needs. 5 / 6 bis central bankers'speeches however, there can be no investment without domestic saving or, alternatively, without continued foreign financing. this is why it is so important in the long run to restore the saving capacity of the private sector. in this context, the development of the second and third pillars of the social security system will not only ensure the system ’ s viability, but will also encourage households to increase their saving and open up a new channel for the financing of business investment. this will enable greece, in a self - reliant manner, to increase its