- committee of the exchange fund advisory committee, mature and arrangements put in place, in collaboration with the industry. allow me to conclude with a commercial targeted at retail investors. the exchange fund notes are a very safe investment – you are putting your money with the exchange fund, which is managed by the hkma. the exchange fund notes provide you with a steady stream of fixed - interest income that is higher than interest on bank deposits. the exchange fund notes are highly liquid – you can sell them any time you want. there are 26 market - makers appointed by the hkma to make a market in exchange fund paper. the exchange fund notes have a transparent and efficient price discovery system – up - to - date prices and yields can be easily found in newspapers and the financial media. but we all should not forget, of course, that the prices of exchange fund notes can go up as well as down, depending on the level of interest rates. end of commercial. thank you.

be trying to prevent banks getting into difficulties in the first place. this requires effective management by the banks themselves as well as careful monitoring by the banking supervisors. the first of these we have tried to address through our recent guideline on the corporate governance of locally incorporated authorised institutions. this is intended to encourage high standards of management in such institutions and thus help them to deal with the challenges ahead. these challenges also require enhancements to our system of banking supervision. as recommended by kpmg / barents, we are introducing a more risk - based approach. this aims to be more forwardlooking than the old style of supervision. it focuses more precisely on the various types of risk being run by individual banks, the quantity of such risks and the quality of the system used to manage them. if used properly, it should lead to a less intrusive and less burdensome supervisory approach towards well - managed institutions. we have been developing this approach over the last year and have applied it to a number of the local banks. we intend to roll it out to cover foreign banks next year. it is important that the whole process should be transparent and to assist in this we intend to issue a framework document quite shortly which will outline the new approach. we are also engaged in a major rewrite of our supervisory guidelines to make them more user - friendly and to put them into a common format. this is a substantial project that will take about a year to complete. in the meantime, we shall be issuing new and revised supervisory guidelines in the new format as they come off the production line. conclusions to sum up, our reform package is not intended to be revolutionary. the hong kong banking system is already well - managed and competitive. but even good players need to improve their game as conditions become tougher. the main responsibility for doing this in the hong kong banking context will rest with the banks themselves. we in the hkma are trying to do our bit by removing possible barriers to change in a cautious manner, and by making sure that our supervisory approach remains appropriate to the changing market environment.