of the supervisory requirements that may potentially be relaxed within the sandbox. examples of these requirements include security - related requirements for electronic banking services and the timing of independent assessment prior to launching of new technology services. banks intending to access the sandbox are advised to get in touch with the hkma early. my hkma colleagues stand ready to discuss with the banks individually on the appropriate supervisory flexibility that can be made available to them within the fintech supervisory sandbox. 18. further details of the fintech innovation hub and the fintech supervisory sandbox will be announced by the hkma later today. competition from neighbouring centres 19. ladies and gentlemen, i have spent quite some time talking about fintech today. now i would like to talk about the third emerging trend that will impact the development of hong kong as a “ brand ” for financial services, which is the intensification of competition amongst financial centres. we all recognise that money managers and asset owners are very smart and extremely mobile. they do have a choice on where they park and manage their money and wealth, and they know it very well. therefore, it is not a question of whether hong kong is good or not. even if we are good, it is a question of whether we are better than our competitors, many of whom have high aspirations and are catching up fast. hong kong as a brand for financial services does not enjoy a monopoly or franchise. we must remain vigilant and diligent at all times if we wish to continue to maintain a competitive edge. 20. in this connection, i am pleased to say that, after several years of concerted effort between the hkma, the tma and the financial industry, we have finally succeeded in changing our tax regime to help make hong kong a more attractive platform for multinational corporates to conduct their group cash management and treasury bis central bankers ’ speeches functions here. however, a good product in itself is not good enough. a good product still requires good and effective marketing. this is what any world class brands always do. so the hkma will, in the months and years ahead, collaborate with the industry to reach out to the corporates on the mainland and overseas to promote hong kong as the hub for corporate treasury centres. this is an ongoing endeavour for which the support of the tma and its members is greatly needed. credibility 21. as i am running out of time, i just wish to have a brief word on the second component of a brand, and that

speeches 25 aug 2022 welcome remarks at the hkimr - adb - bis joint workshop on " monetary policy spillovers " edmond lau, deputy chief executive, hong kong monetary authority 1. good morning, mr park ( chief economist and director general of the economic research and regional cooperation department, asian development bank ( adb ) ), mr zhang ( chief representative for asia and the pacific, bank for international settlements ( bis ) ), ladies and gentlemen. it is my pleasure to welcome you to this workshop on monetary policy spillovers, jointly organised by the adb, the bis and the hong kong institute for monetary and financial research ( hkimr ). we are honoured by the impressive list of panellists, discussants and speakers today, who will share their expertise on this timely and important topic. 2. since early this year, central banks around the world have tightened monetary policy to fight raging inflation, with the us federal reserve ( fed ) being particularly assertive as it tries to cool down the unwelcome rise in inflation and avoid inflation expectations from getting de - anchored. as global financial conditions tightened, financial markets rattled and many emerging market economies ( emes ) experienced capital outflows given their narrowing interest rate differentials against the us. the crux of the latest situation is, will such gyrations in asset prices and capital flows pose a threat to emes ’ financial stability? 3. as far as emerging asia ( em asia ) is concerned, the latest situation does not seem too bad. even though the region saw quite notable bond fund outflows since the fed began to raise rates in march, such outflows have yet to cause any significant disruptions. that being said, there is no room for complacency. for one, as the global economy is heading towards a growth slowdown, if not an outright recession, asian emes may be less able to look for support from external demand to cushion the effect of tighter global financial conditions. moreover, capital outflow pressures faced by the asian region may persist, leaving em asian currencies and fx reserves to bear the brunt of global tightening. 4. unfortunately, there are limits as to how much these shock absorbers can shield the domestic economies from tighter global financial conditions. in particular, even though exchange rate flexibility can be a useful shock absorber, research suggests that currency depreciation is not a panacea for cushioning the impact of us rate hikes. as a