. hong kong is one of the major international financial hubs in the world. it has an open and free business environment, sophisticated financial markets, well - functioning financial infrastructure, a vast talent pool, a sound legal system, and a regulatory system well aligned with international standards. it is the world's largest offshore rmb market. it is also asia's largest asset and wealth management center and 2nd largest center for hedge funds and private equity. the pboc is committed to supporting hong kong's role as an international financial center. we will continue to create an enabling environment for the rmb business in hong kong. we will continue to support hong kong's role as an international asset center and risk management center, and its goal to become a fin - tech and green finance hub in the asia - pacific region. we will continue to support hong kong's financial stability. we believe that, with all its strengths, a favorable policy environment and its talented and hard - working people, hong kong's standing as an international financial center will be further enhanced. finally, before i take up your questions, let me wish this conference a great success! 4 / 4 bis - central bankers'speeches

purchases since last december – this might encourage a somewhat faster pace. in contrast, if bond yields were to move sharply higher, as was the case last spring, then a more cautious approach might be warranted. in terms of the level of rates over the longer - term, i would expect them to be lower than historical averages for three reasons. first, economic headwinds seem likely to persist for several more years. while the wealth loss following the financial crisis has largely been reversed, the great recession has scarred households and businesses – this is likely to lead to greater precautionary saving and less investment for a long time. also, as noted earlier, headwinds in the housing area seem likely to dissipate only slowly. second, slower growth of the labor force due to the aging of the population and moderate productivity growth imply a lower potential real gdp growth rate as compared to the 1990s and 2000s. because the level of real equilibrium interest rates appears to be positively related to potential real gdp growth, this slower trend implies lower real equilibrium interest rates even after all the current headwinds fully dissipate. it is worth noting that the views of market participants as expressed in the eurodollar futures market and those of fomc participants as expressed in the march summary of economic projections seem consistent with one another and indicate an anticipated lift - off sometime near the middle of next year. bis central bankers ’ speeches third, changes in bank regulation may also imply a somewhat lower long - term equilibrium rate. consider that, all else equal, higher capital requirements for banks imply somewhat wider intermediation margins. while higher capital requirements are essential in order to make the financial system more robust, this is likely to push down the long - term equilibrium federal funds rate somewhat. putting all these factors together, i expect that the level of the federal funds rate consistent with 2 percent pce inflation over the long run is likely to be well below the 4¼ percent average level that has applied historically when inflation was around 2 percent. precisely how much lower is difficult to say at this point in time. the fact that the equilibrium real federal funds rate is likely to be lower for a long time underscores the need for caution in applying the benchmark taylor rule as a guide to the appropriate stance of monetary policy. as typically applied, the taylor rule assumes an equilibrium real rate of interest of 2 percent. this seems much too high in the current economic environment in which headwinds persist, and somewhat too high