norman t l chan : hong kong as a private banking hub – a regulator ’ s vision speech by mr norman t l chan, chief executive of the hong kong monetary authority, at the hkab – hkib distinguished speaker series and hkib fellowship conferment ceremony, hong kong, 12 june 2012. * * * peter ( wong ), anita ( fung ), patrick ( fung ), julia ( leung ), ashley ( alder ), distinguished guests, ladies and gentlemen, good afternoon. i am most honoured to be conferred a fellowship by the hong kong institute of bankers ( hkib ) and would like to thank hkib for recognising my contributions, which are in effect contributions of the hkma, to the banking sector. the achievements of hong kong ’ s banking industry are attributable to the efforts of many stakeholders. among them is hkib, which has been providing quality education and training to the banking industry for decades. many industry practitioners, and the banking industry as a whole, have benefited from the good work of hkib. on this special occasion, i am also honoured to be invited to speak in hkab - hkib distinguished speaker series. i will be speaking on “ hong kong as a private banking hub – a regulator ’ s vision ”. i have chosen this topic because over the past few months, the hong kong monetary authority ( hkma ), together with the securities and futures commission ( sfc ) and the financial services and the treasury bureau, has been working very closely with the hong kong association of banks ( hkab ) on what hong kong should do to take the private banking industry to the next higher platform. i would like to take this opportunity to share with you my views on the steps hong kong needs to take to develop as the premier private banking hub in asia. to start with, i want to talk about some facts relevant to hong kong ’ s realisation of this aspiration. hong kong ’ s strengths to be a leading private banking centre wealth in asia - pacific is growing exponentially. according to industry research, the region accounted for half of the growth in global wealth from 2010 onwards. in particular, china was the second top contributor to the growth in global wealth after the us. 1 in 2011, there were about 30 million millionaires worldwide. among these, about 20 % were from asia - pacific. 1 this trend is likely to continue. it is estimated that global wealth will rise 50 % further by 2016

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