anselmo teng : development and supervision of bvi business companies opening remarks by mr anselmo teng, chairman of the monetary authority of macao, at a seminar on “ development and supervision of bvi business companies ”, macao, 23 november 2009. * * * dear mr. baker, honourable guests, ladies and gentlemen, good morning! on behalf of the financial sector of macao, i would like to express our warm welcome and heartfelt gratitude to mr. baker, deputy managing director of the financial services commission of british virgin islands, who has kindly consented to be the speaker of this seminar entitled “ development and supervision of bvi business companies ”. i would also welcome participants from relevant government agencies and financial institutions to attend this informative seminar. one year ago, the financial tsunami, triggered by the subprime fallout, started to take its toll on global financial markets in a scale which is unprecedented since 1930. a vast number of reputable financial institutions encountered severe difficulties in liquidity and solvency arising from toxic assets they acquired in the hey day. fortunately, governments and central banks around the world took concerted actions, which included fiscal stimulus and monetary easing, to stabilize the global financial system. equity and commodity prices have mostly returned to pre - crash levels. the emerging markets, particularly china, are faring well after the crisis. being a micro open economy, macao was inevitably affected by the turmoil. the overall economy of macao started to feel the pinch in the second half of 2008. the shrinkage has started to moderate but growth in 2009 will inevitably show certain degree of adjustment. the financial sector of macao also underwent a mild consolidation since the eruption. as our experience of toxic assets was rather limited, the direct impact of the crisis on macao financial sector was minimal. in addition, the spillover effect of the huge stimulus package of china has effectively uplifted the macao economy. as a result, financial institutions in macao have been able to maintain fine asset quality, ample liquidity and adequate capital. i should say the economy of macao and hence its financial sector have survived and emerged unscathed after the outbreak. our prudential supervision has never been impaired by any crisis. as a responsible member of the global village, the macao sar government has never been lax in its efforts to enhance sound financial supervision through persistent offsite surveillance and onsite inspection applied to authorized institutions. in addition, the monetary authority of

supervise all authorized institutions by conducting on - site inspections, off - site surveillances and prudential meetings. in 2007, amcm issued “ guideline on management of country risks ” and “ determination of market risk adjusted capital adequacy ratio ” to be adopted by financial institutions which will no doubt enhance the stability of our financial system. in the domain of insurance supervision, we emphasized on the revision and perfection of related legislations. at the same time we strengthened our inspection efforts, bashed illegal insurance activities. in perfecting related legislations, we revised “ mandatory automobile civil liability insurance ” and “ mandatory labour civil liability insurance ”. simultaneously, we enhanced inspection of aml measures implemented by insurance institutions. in 2007, amcm carried out on - site inspections on insurance institutions operating in macao, accentuating our efforts in regulating the operation of our insurance market. we strive to maintain a stable exchange rate. in 2007, china achieved record high trade surplus. there was a hefty increase in exchange reserves. the yuan continued to appreciate against us dollar which gave rise to depreciation of the pataca against the yuan. it fueled the pressure on inflation in macao. against such a backdrop, amcm adhered to rules of currency board and link rate, maintained the relative stability of the pataca, which facilitated stable operation of the macao economy. amcm promotes actively cross border financial cooperation. in 2007, as usual, amcm participated in activities relating to financial cooperation with the mainland, our neighbouring regions, countries and international organizations and encouraged the financial industry of macao to communicate and cooperate with overseas entities. for instance, we promoted closer cooperation between our financial sector and portuguese speaking countries and actively participated in meetings with relevant international and regional organizations. we hosted related international activities and successfully hosted the ogbs 2007 annual general meeting. we advocated and deepened financial cooperation between macao and guangdong as well as between macao and shenzhen. we reinforced cooperation with various financial regulatory bodies with a view to effectively bashing illegal financial activities through execution of cross border supervision. we actively encouraged the enlargement of rmb business in macao, promoted further development of rmb business, propagate the circulation of pataca on the mainland, reinforced cross border settlement and cooperation in financial infrastructure and opened up the clearing system for hong kong dollar cheques. in retrospect, we are proud to say that 2007 was again a fruitful year for the macao financial sector. i would like