. 6. the operation attracted harsh criticism from various quarters, with arguments that the government ’ s intervention to prop up the markets was contrary to the basic principles of a free market economy. nevertheless, the operation has proven to be a success. during an extraordinary time of market failure, our resolute and extraordinary measures stabilised the hong kong dollar and the local stock and futures markets, restored confidence of hong kong people and investors, and helped preserve the stability of hong kong ’ s financial system. but this is only half of the story ; equally important is success in engineering a smooth exit. our biggest challenge was to release the huge amount of hong kong stocks amassed during the operation to the market with minimal impact on market stability. this was no easy task. in a clear message issued promptly to the market when the operation ended, the hkma made two pledges. first, the operation was only an extraordinary measure taken at an extraordinary time. the hkma would arrange to dispose of the stocks as soon as possible. secondly, the hong kong sar government would not intervene in the daily operations of the listed companies concerned through its shareholdings. we fully respect and uphold the clear division of labour between the public and private sectors under the market economy. indeed, i can still remember that following the operation, my colleagues and i worked very hard on explaining at international forums and on other occasions the rationale behind the operation and our intention to start disposing of the stocks quickly. after much careful study and bis central bankers ’ speeches planning for a year, the hkma launched the tracker fund, an open - ended exchange - traded fund, in november 1999 and resold hk $ 33. 3 billion worth of stocks to 180, 000 investors. we continued to recoup over hk $ 100 billion in the next three years through the same mechanism. ultimately, our market operation turned in a profit of nearly hk $ 100 billion at prevailing stock prices at that time. 7. the experience of hong kong clearly shows that market failures do occur. in the example i have just outlined, market intervention by the hkma proved to be bold and effective in securing the safety and soundness of hong kong ’ s monetary and financial system. it was, indeed, undertaken in a life - and - death but smokeless war on the financial front. hong kong prides itself on being one of the world ’ s freest and most open markets. nevertheless, as a much smaller market compared with our american and european counterparts

just to name a few : u. s. – 19 %, uk – 23 %, spain – 29 % and ireland – 67 % between 2007 and 2012. recently, there are signs of stabilisation or even an upward trend. however, a rapid rebound of cre prices in most g20 countries to a pre - crisis level seems unlikely in the short - term. if i look at the development of prices and the annual investment activity at once i can see certain coherence between the two. ( slide ) while global invested volumes fell by two thirds from 2007 to 2009, they almost doubled after that in only two years to almost 400 billion u. s. dollars. unsurprisingly, invested volumes for asia - pacific have gained tremendous market share over the last few years and are now at the same level as for europe and twice as high as for north america. ( slide ) having the pleasure of welcoming all of you here in frankfurt – germany ’ s banking city – i would like to take the opportunity to briefly give you some insights into the german cre market. germany has seen a moderate development of cre prices over the last decade. bis central bankers ’ speeches however, the cre market and consequently cre prices – unlike most other european markets – have benefited from the economic conditions here. foreign investors have stepped up their investment activity over the past two years. leaving germany and taking a global view again the question is, what is the state lenders and investors are in? ( slide ) obviously, falling prices have not failed to leave a mark on both. an enormous half of investors in emea and 75 percent in north america are in talks with banks on loan amendments and / or loan extensions. if restructuring or extension of the loan is not possible, investors must find other sources of capital for equity injections or partial loan repayments and if this fails even asset sales are on the agenda. clearly challenging times for investors and following them, the lenders. ( slide ) the latter have chosen a very selective path in financing cre, lately. a more cautious underwriting practice and tighter lending standards can be observed. according to the survey of lenders for dtz ’ global research, a preference for less risky investments was identified. prime assets are in favour of lenders, whereas speculative developments and non - prime assets are currently not part of their strategic agenda. this trend of consolidation is also reflected in new lending, where only a minority of survey respondents expected expansion