##ages with other jurisdictions and international systems. but it has to be said that, so far, these facilities have been serving domestic needs far more than regional needs. this is, i think, a reflection of the rather moderate level of financial system integration in the region. to take banking as an illustration, there may well be quite considerable integration across the borders of immediate neighbours : between hong kong and mainland china, for example, or between new zealand and australia. but, for the region as a whole, this kind of integration is less striking than the presence of banks from the developed markets. for example, the number of us and european banks in hong kong roughly equals that of banks from the region. similar observations may be made about the equity markets. in declining order, we now come to monetary integration. there have, in fact, been some recent efforts at monetary co - operation. these began in 1995 with the collection of emeap bilateral swap facilities that provide us dollar liquidity secured against us treasury securities. in 1997 the idea of an asian monetary fund was aired, but it came to nothing. then, in 1999, came the collection of asean + 3 bilateral swap arrangements under the chiang mai initiative. these cannot be said to amount to efforts towards monetary integration. and, in fact, while ideas may have been thrown around from time to time, there has not really been any formal discussion among asian authorities that i am aware of towards monetary union. why is this the case? i think it is mainly because the obstacles to union appear to be so daunting, and that the special considerations that apply to the asian case throw up so many difficult questions. these " special considerations " are big matters, and they can be conveniently divided into three broad categories : economic, technical and political. let me give a brief outline. the economic issues concern the viability of an asian monetary union. this would involve the replacement of regional currencies with a single one, implying a single monetary policy for participant states. a key concern, therefore, is whether it would work. or whether the pressures would be so intense as to make an asian monetary union unworkable from the outset. at the heart of this question is the degree of real economic convergence between potential members. using the maastricht criteria as a reference point for the degree of nominal convergence among asian economies suggests that asia is far from ready to cope with a single monetary policy. in 2003 only six asian economies were able to keep their

dollar retail bonds, and the most recent one appears to have been issued as far back as in september 2003. today ’ s hkmc us dollar bond issuance would help to meet part of such investment demand. perhaps in times to come there will be more foreign currency bond issuance in hong kong. this bond issuance would add to the diversity of financial intermediation channels and complement the hkma ’ s effort to promote the development of a multi - currency, multi - dimensional financial system in hong kong. finally, i am pleased to see many old friends of the hkmc supporting this new issue. i would like to thank the hsbc and bank of china ( hong kong ) for underwriting a portion of the bond issue as well as placing the notes. taking this opportunity, i would also like to thank the other placing banks, namely, bank of america ( asia ), bank of communications, bank of east asia, chiyu bank, citic ka wah bank, dah sing bank, dbs bank, hang seng bank, fubon bank ( hong kong ), liu chong hing bank, nanyang commercial bank, shanghai commercial bank, standard chartered bank ( hong kong ), wing hang bank and wing lung bank, for their participation in this bond issue. with their extensive branch networks, and sophisticated telephone banking and the internet banking facility, i look forward to another successful retail bond issue by the hkmc. thank you.