. in particular, the euro has been used by international borrowers as a currency to secure funding. let me give you two examples. since the launch of the euro, around one - quarter of international money market instruments issued by residents outside the euro area were denominated in euro. this is mainly due to the investors ’ interest in the higher liquidity brought about by the creation of the integrated money market. before the launch of the single currency, only 8 % of all international money market instruments issued by non - euro area residents were denominated in the legacy currencies. likewise, around 30 % of international bonds and notes issued by residents outside the euro area are currently denominated in euro, as opposed to less than 20 % in euro legacy currencies prior to 1999. also in this case, market expectations of growing liquidity have probably been the key driving force behind the upward trend. let me add that, outside the euro area, the euro is not only used by private agents but also by the official sector. in particular, more than 50 countries currently maintain an exchange rate regime involving an external anchor in which the euro plays a role. as a reserve currency, the euro accounts for 13 % of official reserves and, admittedly, plays currently a smaller role than the us dollar, whose share amounts to 66 %. the ecb itself, by holding a large amount of us dollar foreign reserves, contributes to the prevailing role of the us currency as an official reserve currency. the current share of the euro in international reserves is comparable with the share reached by the euro legacy currencies prior to the introduction of the euro, implying that, in aggregate terms, there had been no reallocation of official reserves out of the us dollar. the link between domestic and international factors let me now elaborate briefly on the interaction between domestic and international factors as a determinant of the international use of the euro. without doubt, when deciding on the use of the euro or another currency as a means of transaction, international markets also assess economic policies carried out in the various economic areas. in this vein, the commitment of the ecb to price stability – which is defined as an inflation rate below 2 % over a medium - term horizon – should underpin international investors ’ confidence that the purchasing power of their euro - denominated assets will be maintained over time. indeed, a currency can only reach international status if internal price stability is ensured over the long run. international investors also consider

macroeconomic, fiscal and monetary policies, and all of them had paid a heavy price for their past mistakes. the fact that the latest series of crises erupted in the developed world does not mean emes are immune from the spillover effects. more fundamentally, the emerging market economies, including hong kong where household debt to gdp ratio saw a record high, must learn from the latest mistakes of the developed world and take extra care in not getting into the mind - set or habit of spending beyond our means, whether at the household, corporate or government level. hong kong should in particular guard against the temptation of “ collective irresponsibility ” by pushing for or condoning public policies that entail spending that cannot be sustained in the medium to longer run, or else we would be mortgaging the future of our children and grandchildren. this again is easier said than done, and requires considerable wisdom of hong kong people and the courage and skills of our leaders to resist increasing pressure and temptations for unrestrained public spending. hong kong ’ s population is aging, and aging fast. at present, the elderly bis central bankers ’ speeches dependency ratio of hong kong is 5 : 1. this means that hong kong now has 5 persons within the age group of 15 – 64 supporting each person over the age of 65. however, in over two decades ’ time, the ratio will deteriorate significantly to 2 : 1, which means that there will only be 2 persons in the age group of 15 – 64 supporting one elderly person. the government has already made it clear that, while we are having budget surpluses, structural budget deficits will occur within a decade mainly due to changing demographic structure. 20. ladies and gentlemen, i have just made a long speech and now i would like to leave you with several key takeaways. first, it is very easy for governments to fall into the trap of going down the path of fiscal unsustainability as a result of the collective irresponsibility syndrome as well as population aging. second, it is very, very hard and immensely painful to try to get out of a government debt crisis. third, more likely than not, it is the next generation and the next and the next that will have to shoulder the costs and to suffer the pains for excessive spending and stock piling of debts by the current generation. if we don ’ t want to mortgage the future of our children and grandchildren, try not to leave with them a pile of debts as in