today. the snb has specified its monetary policy mandate and rendered it measurable. a situation of price stability prevails when the consumer price index ( which is calculated by the swiss federal office of statistics, and not by us ) shows an average annual rate of below 2 %. deflation is also regarded as a failure to attain the objective of price stability. where we are independent is in our choice of the means by which we fulfil this mandate. under article 9 of the national bank act, we may use a great many instruments, as needed. this broad flexibility within our statutory legislation ( which came into force in 2004 ) proved to be a huge advantage during the crisis, also by comparison with other central banks. for instance, we were quickly in a position to issue our own debt certificates and develop a large market for them. we do not use these snb bills because we need money. they are used to absorb excess liquidity in the money market. second, our independence is not unconditional. with the privilege and duty of independent action comes a particular responsibility. and whoever bears responsibility in our democratic constitutional state must be accountable for his or her actions, for the means chosen and the results achieved. 6 consequently, under article 7 of the national bank act, we maintain a regular exchange of information with the federal council, and the snb and the federal council inform one another of decisions that will have a significant economic or monetary impact. this is important for us, because it ensures that we are familiar with the fiscal political framework within which we conduct our monetary policy. nevertheless, each body retains full cf. also message on the revision of the national bank act of 26 june 2002, ff 2002 6107 to 6109. together with the possibility of re - election, this helps to set the incentives for members of the governing board in a way that ensures that long - term fulfilment of the statutory mandate is also in their individual interest. other societies espouse comparable principles, “ it cannot be acceptable in a democratic society that a group of unelected individuals are vested with important responsibilities without being open to full scrutiny and accountability. ” cf. speech given by alan greenspan on 5 december 1996 on “'the challenge of central banking in a democratic society, ” washington d. c. also, “ democratic principles demand that, as an agent of the government, a central bank must be accountable in the pursuit of its mandated goals, responsive to the public and its

was not prepared to take deposits. if necessary, we would seek the cooperation of the home supervisor to enforce this request. it might also be necessary to supplement this with a reminder to local internet service providers about the advertising rules in the banking ordinance and to seek their cooperation to block offending websites. the problem with this, however, is that the website in question may not actually be posted on the local isp ’ s server – in which case, there may be little that the isp can do. if the bank concerned is not respectable and it is based in an uncooperative jurisdiction, the situation would be more difficult to handle. this reinforces the point that the public in hong kong should be very careful about sending money to any bank which advertises on the internet and which is based in a jurisdiction where the degree of regulation is in doubt. in the final analysis, no form of regulation can replace individuals taking care in selecting the party with whom they do business. again, this reinforces the importance of brand name and reputation in the internet banking context. conclusion to conclude, i think that e - banking is the way forward for the banking industry, and banks in hong kong are well - placed to capitalise upon this. e - banking does bring new challenges and perhaps additional risks for banks, consumers and regulators. but it also brings new opportunities to improve the efficiency of the payment system and the quality of banking service. there is no question of avoiding the changes. the question is how to manage them. this is mainly an issue for the banks. but the hkma can help by providing a regulatory environment in which the risks of such changes are minimised, and the potential benefits can be safely realised. this is an on - going task which has only just begun. we have already made a reasonable start and i hope we will see encouraging developments in the next few years to come.