you. they include a vast, critical mass of markets and financial services in commercial and investment banking, securities and derivatives activity, investment and fund management, insurance and commodities and so on, involving an extraordinary concentration of the strongest financial businesses from all around the world. to give just one example, uniquely among the major countries we have more banks which are incorporated abroad operating in the city than domestic banks, and over half of the total deposits of the uk banking system is denominated in foreign currencies, worth over £1 trillion - - that ’ s a one and twelve noughts - - notwithstanding the current strength of sterling. the particular strengths that have contributed to this massive concentration of international business are many and various. they include : the english language ; the convenient time zone ; the ready availability of the relevant trading and other financial skills as well as professional support services - - in law, accountancy, tax, property, communications and so on. they include effective infrastructure. and they include importantly, too, an adaptive regulatory framework which has in fact been remarkably successful in maintaining confidence in financial institutions and markets without stifling innovation and risk - taking. all of these factors - - and no doubt others - - help to explain why some 600, 000 people are estimated to be employed in finance and other business services in greater london - - a number which i believe is roughly equal to the total population of frankfurt. now you will have noticed that none of these factors has anything to do with the question of the national currency used either here in the uk or in continental europe. the main impact of the advent of the euro on financial activity, as i see it, is that it will encourage the development of broader and deeper and more liquid markets, in financial instruments of all kinds, where they are currently fragmented because they are denominated in the various individual national european currencies. the city of london thrives on liquid markets regardless of the currency - - and it will thrive on the euro, whether the uk is “ in ” or “ out ”. measured in these terms the introduction of the euro represents an opportunity for london rather than a threat. i have no doubt whatever that there will be a vigorous euro - euro market in london, come what may, just as there is a vigorous market in euro - dm or euro - francs as well as euro - $ and euro - yen at present. the reality is that the location of financial activity does not depend upon the local currency. it

hong kong is diverse and not always able to come to a single view on issues that affect it. nor is there any reason why it should do so on every issue. however, hkab could develop its profile and gain strength as a representative organisation if it were to work on developing its role as the clear industry voice. the second main recommendation in the report concerns hkab ’ s role in the development of the code of banking practice. the code, which sets the standards for banking services, is jointly issued by hkab and the dtc association, with the endorsement of, and involvement of, the hkma. it is a non - statutory code, although compliance with it is expected of all ais. it is monitored by the hkma as part of its regular supervision, although, as i mentioned earlier, we have no formal, statutory mandate in this project. there is, i think, scope, as the report advocates, for hkab to take greater ownership of this code, particularly in the setting of standards – and in ensuring that these are high standards – and in monitoring and enforcing compliance. this would be consistent with the practice of banking associations in other jurisdictions, and it would be a logical development of hkab ’ s role. a third area highlighted in the consultant ’ s report is consumer education in the field of banking services. this is a neglected subject in hong kong. the question of which organisation should take the lead in this is, of course, tied to the question of who should take on consumer protection. but, whatever the answer to the second question, it seems clear that hkab would need to be involved in some form or another. this, in fact, reflects the practice among industry organisations in other jurisdictions, many of which have a strong tradition of producing plain - language factsheets, webpages and other resources on running personal finances, protecting one ’ s financial interests, and making the most of new forms of financial services. moving away from the recommendations in the consultant ’ s report, there is, i think, a fourth area in which hkab could become more involved. this is in the development of hong kong ’ s financial infrastructure. this is one of the hkma ’ s key policy objectives, but it is also an area in which hkab has a keen and constructive interest. in particular, hkab, together with the hkma, is joint owner of hong kong interbank clearing ltd, which operates one of the key features of hong kong ’