nearly 80 of the top 100 global money managers are in hong kong. the total assets under management hit a record high of us $ 2. 1 trillion in 2013, with 72 % of the funds sourced from mr david puth, ceo of cls group holdings, and cls bank international. bis central bankers ’ speeches non - hong kong investors. hong kong ’ s net international investment position has also grown from 250 % of our gdp in 2004 to close to 300 % in recent years. 10. 2004 also marked the commencement of offshore rmb business in hong kong and we are now the global hub of offshore rmb business. 11. against this encouraging backdrop, the average daily fx turnover in hong kong has more than doubled, from us $ 102 billion in april 2004 to us $ 275 billion in april 2013. in fact, hong kong has become the 5th largest fx trading centre in 2013, up from the 6th place in 2004. in short, hong kong has further consolidated its status as an international investment, banking, payment and commercial centre. 12. effective fx settlement is a prerequisite to all these achievements, given the significant fund flows that an ifc, such as hong kong, needs to handle, and the need to maintain the stability of the hong kong dollar under the currency board arrangement. ( ii ) cls developments 13. as for cls, as many of you know, it has gone from strength to strength in the past decade. for instance, the number of currencies it supports has grown from seven from the start, to 17 today. the number of settlement members has also increased from 39 to 62. 14. moreover, the volume and value of transactions via the cls have expanded significantly, with an average daily value of us $ 5 trillion 2 and daily volume of one million transactions. this should not be surprising as the global fx market has become much bigger, with the average daily turnover in 2013 ( usd 5. 3 trillion 3 ) three times bigger than in 2004. challenging times 15. as close partners, we have also faced significant challenges during difficult times in the past decade. 16. we all remembered vividly how a large part of the financial markets had almost come to a standstill after the collapse of lehman brothers in september 2008. yet, the foreign exchange market continued to operate smoothly. many market players had attributed the market stability to the support provided by cls. 17. i also believe that our linkage with cls has also provided the functional

something that i positively welcomed in the immediate situation with which we were confronted. without it we would have been even more dependent upon consumer demand than we have been. in the event domestic consumption growth has continued to hold up pretty well ; but it has done so inevitably - on the back of a rapid build - up in household indebtedness, including mortgage debt, which in turn was associated with a sharp acceleration in the rate of increase in house prices - to some 25 % on average across the uk over the past year. and that is something that, as we've been pointing out for some time, clearly can't be sustained for ever. so that's the background against which i turn once again to the question of whether we can continue to maintain reasonably steady growth of output, with high levels of employment and continuing low inflation over the next two years or so. now there is no denying that we are - as we always are - faced with significant uncertainties and potential risks in the period ahead, even without the possibility of imminent war with iraq. the global economy may not pick up gradually - as we certainly hope that it will - and some real gloomsters still talk of the possibility of a double dip back into recession. domestically the gloomsters talk of the risk of a sudden sharp fall in the rate of growth in consumer spending - often related to a " crash " in house prices generally. that's to say not just a sharp moderation in the rate of increase in house prices but a fall in their actual level generally. and the real pessimists argue that the longer the fall is delayed the more dramatic it will be. now it is certainly true that if these risks were to materialise then we would indeed be hard pressed to keep the economy moving forward. but such risks need to be kept in proper perspective. the question is - are these possible developments a necessary - or even the most likely - outcome? i don't think that they are. it's entirely understandable - in the light of the global industrial slowdown and generally weak export markets, and after a third year in a row of sharply falling equity prices, that business and financial market confidence should remain subdued. and people seem sometimes surprised to be told that, on the macro - economic data, we passed the trough a year or more ago. the us economy, in particular, on which so much of the rest of the world depends actually expanded by just over 3 % in the year to