peter pang : a decade of hong kong dollar settlement in the cls system opening remarks by mr peter pang, deputy chief executive of the hong kong monetary authority, at the 10th anniversary celebration of hong kong dollar settlement in cls, hong kong, 21 october 2014. * * * david 1, distinguished guests, ladies and gentlemen, i am honoured to be here today to celebrate the 10th anniversary of the hong kong dollar settlement in the cls system. opening 2. if we were a married couple, this event would mark our tin anniversary, with tin symbolizing durability and pliability. it is good to note that our bonding remains robust, despite the fact that cls has 16 other currency partners, and its desire to have more in the future. 3. according to jane austen, “ happiness in marriage is entirely a matter of chance ”. being a monetary authority, the hkma would not leave such an important financial infrastructure for addressing the fx settlement risk to chance. 4. the one thing that keeps our bonding with cls strong is our common vision – to provide the solution to help market players eliminate the fx settlement risks through a highly effective and efficient settlement platform. 5. our decision to join the cls in 2004 was based on the simple fact that cls provides the most powerful global solution to eliminate the fx settlement risks among market players. and cls has delivered such a solution without a hitch in the past decade. good times 6. like all happy marriages, the bonding should foster growth and help the partners to realise their potential during good times ; and provide an anchor to help them to face the challenges of the bad times with resilience and confidence. 7. both partners have certainly done well during the good times in the past decade. ( i ) hk ’ s developments 8. during this period, hong kong has continued to consolidate its role as a premier international financial centre and has become a more globalised economy : – the total assets of the banking system have increased 2. 7 times to hk $ 18 trillion, with foreign currency assets accounting for about 60 % of the pool. – the market capitalization of the hong kong stock exchange has become more than 4 times bigger, advancing from number 8 to number 6 in the global ladder. – the bond market has also increased by about 3 times, with foreign currency denominated bonds accounting for about 40 % for most of the time. 9. hong kong has also become a hub for private wealth and asset management.

resilience and, importantly, confidence, that our market players needed in those critical moments. 18. this is certainly the case post lehman ’ s collapse, as hong kong ’ s companies and individuals liquidated overseas assets and repatriated hk $ 220 billion back into hong kong to tide themselves over the liquidity and credit squeeze. looking forward 19. it is no exaggeration to say that cls is now one of the most important pieces of infrastructure supporting the global financial market. the creation of the cls bank is also a shining example that demonstrates the power of private sector - public sector collaboration. the hkma is proud to be part of that success story. cls reports both sides of an fx transaction. to adjust the average daily value data to equate to the same reporting convention used by the bank for international settlements, the gross values should be divided by two. bis triennial central bank survey, fx turnover in april 2013. bis central bankers ’ speeches 20. so, what ’ s next? i expect markets to keep changing, and they will only change faster in the coming years. 21. as technology advances, and asia providing the engine for global growth in the medium term, i see plenty of opportunities for cls to put its strategic focus in the region. the hkma welcomes the cls ’ efforts to put more new currencies and members into its orbit. 22. i look forward to seeing this happen sooner rather than later, and welcome opportunities for cooperation and knowledge sharing between us. this is all because of what i said earlier – that we shared a common vision, and a more widely participated system should mean even less settlement risks for market players. 23. i look forward to celebrating our silver anniversary in 2029. thank you. bis central bankers ’ speeches