norman t l chan : the future of asia ’ s finance welcome remarks by mr norman t l chan, chief executive of the hong kong monetary authority, at the imf - hkma joint conference, hong kong, 28 february 2014. * * * good morning, deputy managing director zhu min, counsellor jose vinal, ladies and gentlemen, 1. it gives me great pleasure to welcome you to this conference jointly organised by the imf and the hkma. the theme of this conference is “ the future of asia ’ s finance ”. in order to predict the future, one must understand and learn from the past. if we don ’ t understand where we are and what has brought us here, it is very hard to predict where we will be in the next 5 – 10 years. 2. asia ’ s finance is now at a crossroad. we have to decide where we want to go and how to get there. this is not the first time and won ’ t be the last that asia ’ s financial markets are facing this situation. 3. the last time asia was at a crossroad was 1997 / 98 after the eruption of the asian financial crisis. in the two to three decades before mid - 1990s, asia produced a couple of economic miracles : the emergence of the four asian dragons and four asian little tigers, all of which went through phenomenal economic growth and significant rise in living standards. however, unlike the developed economies in the west, asia ’ s growth in this period was propelled mainly by bank finance. massive amounts of capital, mostly in the form of external bank borrowings, flew into emerging asia during this period. in 1997, total amount of international bank lending to asia amounted to us $ 840bn. most of these external finance were denominated in us dollar and with rather short tenor. of course we now understand this kind of external finance is very risky as it entails currency mismatch and maturity mismatch. but these risks were simply ignored or brushed aside while everybody was enjoying the asian boom prior to 1997. then the bubble burst and the crisis - hit asian economies all learnt very important lessons in a bitter way by paying a heavy price. 4. since the asian financial crisis the emerging asia has implemented many structural reforms and has now re - emerged as stronger and more resilient economies. 5. as a result, asia, once again, has gained centre stage and, until the last year or so, become the preferred destination of

end to the back office. both technical competency and ethical standard form the basic components of the professionalism of our industry practitioners. the hkma encourages the industry to promote a competency framework for new entrants and on - going professional training. the financial market is very dynamic and rapidly changing. the industry therefore should ensure that staff are well - equipped with the necessary technical and market knowledge and skills in performing their jobs. it is also fundamental for private banks to act in the best interests of clients at all times. the hkma therefore encourages the industry to promulgate a set of professional and ethical standards that are designed specifically for the private banking practitioners. i know that the industry is moving towards this direction. hkib has been providing professional qualifications like certified financial management planner. in 2011, the hong kong securities institute ( hksi ) also introduced the certified international wealth manager programme. these are well - organised programmes that help enhance the technical competency of industry practitioners. on a separate front, we very much welcome the industry ’ s proposal to set up a new industry body called “ private wealth management association ”. i also support the initiative to further upgrade the professional standards of industry practitioners by developing a new competency framework for wealth management. i envisage that, under this framework, industry practitioners can take different courses provided by professional bodies such as hkib, hksi, treasury markets association and other tertiary institutions, and ultimately acquire a professional qualification that is widely recognised and accredited in hong kong and beyond. we in the hkma will be pleased to work with the private banking industry and other stakeholders to ensure that hong kong has a large pool of talents with world class technical competence and professionalism. conclusion ladies and gentlemen, i would like to conclude my remarks today by posing the following three questions. first, what are the prospects for hong kong to develop into the premier private banking hub in asia? the answer is clear. as hong kong possesses key and unique competitive advantages in serving rapidly increasing number of wealthy population in china and the rest of asia, there will be exceptionally huge business opportunities and potential for our private banking industry. second, does hong kong presently have an appropriate regulatory framework that can help sustain a healthy development of the private banking industry in the long run? the answer is “ yes ”, but i need to qualify the answer because i am acutely aware that no regulatory bis central bankers ’ speeches framework is perfect and can afford to remain static, bearing in mind the ever changing market conditions and