investors have been using hong kong as their main platform for overseas direct investments ( odis ) to reach out to the world. this clearly demonstrates that hong kong, under the “ one country, two systems ” framework, is serving the needs of mainland customers for offshore financial services. it is therefore natural to see the rapid growth of hong kong ’ s private banking business in recent years. from mid - 2010, 7 new private banks have been set up in hong kong, taking the total number of private banks to 39. further, the hkma is seeking to modify the licensing requirements for banks so as to facilitate a broader range of financial institutions, including those specialised in private banking, to establish an operation in hong kong. what kind of regulatory framework hong kong needs to support the sustainable development of private banking? while hong kong is fortunate enough to be endowed with many underlying competitive advantages, these advantages are not enough, in my view, to sustain the healthy development of our private banking industry in the long run. hong kong also needs a regulatory framework that is user friendly to private banking clients and yet sufficiently robust to provide appropriate investor protection. the regulatory framework in hong kong is basically a disclosure - based regime, supported by suitability assessment by intermediaries at the point of sale. in a nutshell, product issuers have to make adequate disclosure in product documents about the features and risks of investment products. intermediaries, when making a recommendation or solicitation in respect of an investment product, must assess the product suitability for individual clients, and clearly explain to clients the key product features and risks. a proper suitability assessment starts with a robust know - your - client ( kyc ) process and client risk profiling. these processes not only help to fight money laundering and the financing of terrorism, but also enable private banks to obtain relevant information to better understand their clients, including their background and, most importantly, their risk appetite and investment needs. by doing so, private banks can agree on an investment strategy with clients and provide suitable products and services that fit their needs. bis central bankers ’ speeches as we all know, private banking clients cover a wide spectrum of individuals. at one end of the spectrum there are clients who are highly seasoned investors, at the other end there may be unsophisticated clients with only very basic investment knowledge, notwithstanding that they have substantial wealth. while our regulatory framework is aimed at providing appropriate investor protection to all clients, regardless of the size of their wealth,

joseph yam : can the euro be a benchmark for asian monetary co - operation? remarks by mr joseph yam, chief executive of the hong kong monetary authority, at the keynote discussion : “ the euro : a stabilising factor of the international monetary system. can the euro be a benchmark for asian monetary co - operation? ” before the paris europlace financial forum : the euro markets in a global investment strategy, hong kong, 21 march 2005. * * * it is a great pleasure to be here this morning to take part in this keynote discussion on the euro hosted by paris europlace. one of the great benefits of living in an international financial centre is the opportunity to share something of the life and culture of other parts of the world without leaving one's own city. we have always been fortunate in hong kong in our enjoyment of the fruits of european and particularly french - civilisation. we are currently enjoying, as part of " the year of france in china ", the superb impressionism exhibition at the hong kong museum of art : together with all of the excellent performances in our international arts festival, and the growing popularity of al fresco dining, this is helping to create a very european atmosphere in hong kong this spring. and, from what i see on the streets, i do not get the impression that the strong euro is having any effect on sales of european fashion. today's forum therefore seems to fit in very well with the european spirit now sweeping hong kong, and i congratulate the organisers on putting together a very lively and topical programme. it is a particular pleasure to be presenting together with christian noyer, governor of the banque de france. he has made some very thoughtful remarks on the first question for discussion. i intend to comment on the second question : " can the euro be a benchmark for asian monetary co - operation? " but before i address this question, we need to ask another question : how ready is asia for closer monetary co - operation? we are, i think, all aware of the considerable differences in the political systems, the cultures, the historical backgrounds, and the economic, financial and monetary systems of the countries in this region. i think it is largely accepted that these differences are greater than the differences between the various economies that make up the euro zone. nevertheless, it is important not to overstate them. nor should we overlook the regional integration already in progress in the trade, financial and monetary spheres. let