capacity utilisation, an increase in per capita employee compensation of 2. 9 % is expected. but it was not primarily my assessment of the need for action which made me sceptical about qe, but more the combination of the need and the instrument at hand – government bond purchases. i do not expect qe to have no impact on inflation. but the effects are difficult to gauge, and it can be assumed that they will be weaker than in the us, for example, because interest rates in the euro area today are already much lower than in the us, especially when the first qe programme was launched. moreover, the funding of us companies is much more capital market - based than that of european businesses, and wealth effects are generally smaller, too. and government bond purchases involve the fundamental risk of mutualising sovereign liability risks via the central bank ’ s balance sheet. while this risk can be more or less ignored for countries with their own currency, it can be a major problem for a monetary union – especially so for one which, like the european monetary union, is not a fiscal union. at the end of the day, it could introduce common liability through the back door. and in this regard, i am a guy who prefers to use the front door. that is to say that it ’ s up to elected governments and parliaments to make such far - reaching decisions. i do acknowledge that the adopted sovereign bond purchase programme partly takes into account some of the concerns related to earlier programmes : only a small part of the programme is subject to risk sharing among the central banks of the eurosystem. additionally, the governing council decided on limits for the eurosystem ’ s purchases of individual bond issues and for its overall purchases of debt of one single country. this is designed to ensure that governments continue to rely on the capital markets for their funding. despite all these measures, which obviously make the qe programme less problematic than earlier sovereign bond purchase programmes which aimed to reduce the risk premia of individual countries, one important risk nonetheless remains : the national central banks will become the most important creditors to their governments, which might ultimately put the independence of monetary policy at risk. the purchases will make life easier for finance ministers. they will not be amused when the governing council considers exiting its ultra - loose monetary policy. and they might be tempted to put political pressure on the eurosystem. in the european monetary union, however, fiscal discipline is absolutely essential because the set - up of

, cooperation and knowledge exchange. today we have the presence of 300 leaders from various sectors including finance, architecture, building and construction engineering, project management and consulting, project development and operation as well as professional services, many of you being the senior management of your leading organisations in the field. indeed, hong kong possesses a critical mass of financial professionals which can support the operations of aiib in areas such as project financing, bond issuance, investment, financial management and foreign exchange management. moreover, hong kong has expertise in project negotiation, works contracts preparation and management, international law as well as professional arbitration services, enabling us to take part in the planning, implementation and operation of such projects. the steadfast implementation of the belt and road initiative also creates opportunities for hong kong to make best use of its strengths as the global offshore rmb business hub and an aspiring infrastructure investment and financing platform. the setting up of iffo would provide a platform for pooling the efforts of investors, banks and the financial sector to offer comprehensive financial services for various infrastructure projects. 1 / 2 bis central bankers'speeches since the launch of iffo by the hkma in july 2016, work has progressed very quickly and significant progress has been made on all fronts. just last week, our list of partners expanded from 41 to 54, bringing in new additions from the insurance, banking and legal sectors, as well as international business council and corporation which are experts in the infrastructure development field. iffo is also an active participant at various industry forums promoting the use of hong kong ’ s platform for infrastructure investments and financing both locally and overseas. this morning, president jin will share with us his views on aiib ’ s operations, project planning and management. this seminar will be a useful platform for constructive dialogues among the financial industry, infrastructure - related business sectors, and aiib, to exchange views on the latest infrastructural development trends, and how we can harness the opportunities arising from the establishment and projects under aiib. i shall now hand over the time to president jin for his most anticipated speech. thank you. 2 / 2 bis central bankers'speeches