history of our continent. since malta joined the eu in 2004, and particularly since the maltese lira entered erm ii in 2005, the central bank of malta has been making the case for an early adoption of the euro. and for good reason. for a start, the economy was clearly well suited to participate in economic and monetary union ( emu ) : it has a long history as a market economy ; it is already closely integrated with the euro area through trade and finance ; it has close similarities with the euro area in the sectoral composition of output and employment as well as in terms of business cycle synchronisation ; it enjoys a relatively high level of development, with a per capita gdp close to the euro area average ; and its currency has a long history of stability. the euro, furthermore, offered the prospect of enhancing the economy ’ s potential to grow faster. the elimination of exchange rate risk and currency conversion costs should result in increased trade, while the low interest rate and inflation environment of the euro area should make for reduced business costs and greater macroeconomic stability. combined with the fiscal discipline associated with monetary union, this is expected to translate into higher credit ratings and improved investment prospects. from a central banker ’ s perspective, moreover, a key benefit of euro area membership will be the elimination of the risks inherent in managing a small, vulnerable currency and their replacement by the greater security afforded by the world ’ s second most important currency. finally, the object of our quest, that is participation in emu, was desirable for another reason. we were aware that we would thus become part of a framework that has been successful in fostering economic growth and employment creation. much of the credit for this belongs to the european central bank ( ecb ), whose steadfast commitment to price stability has created an environment conducive to investment, reflected in the fact that interest rates are low across the yield curve. the ecb ’ s credibility in fighting inflation is now so well established, moreover, that long - term inflation expectations are well anchored at around 2 %. price stability clearly yields important welfare benefits. so there are both advantages and opportunities for policy makers and economic agents in the euro area. but in setting out on this new phase of malta ’ s economic development, we must be aware that, while the ecb can, and indeed has, delivered low and stable inflation, it cannot use the interest rate to permanently increase growth. from malta ’ s perspective, therefore, the

mr. carse reports on the initiatives taken concerning financial industries in fujian, hong kong and taiwan speech by the deputy chief executive of the hong kong monetary authority, mr. david carse, at the symposium on the financial exchange and cooperation of fujian, hong kong and taiwan, held on 8 / 8 / 98. i am pleased to be here this morning to welcome you to this symposium. the chinese banks ’ association is to be congratulated for organizing this important initiative with the co - sponsorship of the fujian provincial government and chinatrust commercial bank. the idea of the symposium, as i understand it, is to facilitate the exchange of ideas concerning the financial industries in the three regions and the exploration of cooperative opportunities between them. 2. such an initiative could not have come at a better time. the current financial crisis is creating havoc among the asia economies. initially, the damage was felt in the financial sector. but the full impact is now being seen in the real economy as output and trade are crippled by higher interest rates, the burden of foreign currency borrowing and the credit crunch. the mainland of china, hong kong and taiwan have survived the crisis in better shape than most other economies in the region. but they have not been unaffected as events of this week have demonstrated in hong kong where we have witnessed further speculative pressure on the hong kong dollar. 3. in this kind of uncertain economic environment, it is all the more important that we should be trying to maximize the opportunities to develop trade and investment links between neighbouring economies. that is why this symposium is timely and important. the existing economic links between fujian, hong kong and taiwan provide a solid platform on which to build for the future. taiwan and hong kong are already major trading partners with taiwan ’ s exports to hong kong accounting for 23. 5 % of its total exports in 1997. visitors from taiwan also account for a significant proportion of the total number of visitors to the territory and thus make a major contribution to the tourist industry in hong kong which, as you will know, currently needs all the help it can get. 4. trade between hong kong and fujian is also growing rapidly in both directions and both hong kong and taiwan are a major source of overseas investment into the province. there are over 10, 000 hong kong enterprises in fujian. 5. the hong kong presence in fujian includes a number of banks from hong kong, including bank of east asia. the same bank also maintains a branch in taiwan which puts it in a good position to take advantage