governance in banks. it will be the responsibility of the board of directors and senior managers of banks to navigate the way through the strategic challenges that i have described, and they must ensure that they have the capacity to do so. corporate governance is of course not just important for banks. it is something that needs to be addressed in relation to all companies. the financial secretary recognized this by announcing in his budget speech that he had asked the secretary for financial services with the assistance of the standing committee on company law reform to conduct a comprehensive study on corporate governance in hong kong this year. the objective will be to plug any gaps in the corporate governance regime and to become a benchmark in the region. market bodies, professional organizations and regulators will be asked to help in this task. your own association may be able to contribute. i do however believe that sound corporate governance is particularly important for banks. the rapid changes brought about by globalization, deregulation and technological advances are increasing the risks in banking systems. moreover, unlike other companies, most of the funds used by banks to conduct their business belong to their creditors, in particular to their depositors. linked to this is the fact that the failure of a bank affects not only its own stakeholders, but may have a systemic impact on the stability of other banks. all the more reason therefore to try to ensure that banks are properly managed. it is true to say that banks in hong kong are already well managed by international and certainly by regional standards. the fact that they survived the financial crisis in generally good shape is a testament to this. however, during the financial crisis, the hkma came across a few individual cases where the board of directors did not perform as well as might be expected. and this, coupled with the challenges that lie ahead, has led us to look at ways in which corporate governance among the banks might be further enhanced. if i could sum up our objective, it would be to try to reassert the role of the board of directors in banks. while the day - to - day running of banks should certainly be left in the hands of the management, the board must play a leadership role in approving the objectives, strategy and business plans of the bank, monitoring the performance of management and ensuring that the internal control and risk management systems of the bank are effective. the board must also make sure that the bank conducts its affairs with integrity and in accordance with high ethical standards. the board is part of the system of checks and balances

mr latter gives an overview from hong kong of eight asian economies keynote address by mr tony latter, a deputy chief executive of the hong kong monetary authority, at the asian financial markets conference held in hong kong on 26 - 27 april 1999. thank you for inviting me to address your conference today. it is encouraging to see such a wide and distinguished representation here from the financial and commercial communities. indeed, when i looked down the advance attendance list, i quickly realised that there would be very little which i could tell you about market developments in hong kong that you didn ’ t know already. so, if you will allow me, i should like to spend some of my time standing back a little from specific market topics and looking instead of some of the macroeconomic forces which shape their development. i shall focus my analysis on eight asian economies [ see table ]. you will note that the list does not include japan, hong kong or singapore. that is because they can already be regarded as having relatively mature financial infrastructures and they are largely free of capital controls. thus, for reasons which will become apparent as i proceed, they do not fit into the story. the table shows the level of physical capital investment within each economy ( specifically, gross domestic fixed capital formation as a percentage of gross domestic product ) for the ten years to 1997. in most cases this was at a very respectable level ; all figures fall in the range 22 - 38 % of gdp on average for the period ; by way of comparison, 1997 figures for usa, japan and germany were 18 %, 26 % and 19 % respectively. also shown is the level of total domestic savings ; this is the sum of savings by the household, corporate and government sectors ( and may of course include dissaving by one or more of those ). for certain purposes i would have liked to show the household component of the total, but sufficient data are not available. the third column displays second minus the first - i. e. the excess of savings over investment on these measures. for all but two of the economies, domestic saving has outstripped fixed capital investment - in some cases by a substantial margin. but these figures tell us nothing about the intermediation process between saving and investment or about the role of financial institutions and markets. much of the investment may take place within the same economic unit as where the savings arise, or be directed by government, without any requirement for third - party intermediation. of course, if domestic saving is channel