who is able to make lethal passes to the strikers to score goals, and at the same time organise and support the defence to consolidate the victory for the team. 12. like the mid - fielder in the soccer team, the corporate treasury function needs to be strategically located to support the front line business team in spots where they can strike business deals and where defence can be efficiently organise to handle the risks that may be encountered by the team. in the context of asia, there is a compelling case for mncs to set up corporate treasury centres in a financial centre where they can easily capture the china opportunities and where the key treasury functions can be organised efficiently. 13. this can be better achieved by the formation of a regional ctc to centralise the management of treasury activities which is essential for advancing operational efficiency, risk management and cost reduction. the business case is obvious and compelling. regional cash pooling reduces idle cash and transaction costs by standardising payment systems and centralizing foreign exchange management. cost of capital can be reduced by optimising external and internal funding. it can also optimize the corporate tax structure and compliance with international regulatory requirements to support global business expansion. 14. hong kong is keen to be considered by mncs as a location for setting up ctcs as we see huge benefits in becoming a ctc hub in the region. the cash pooling function of ctcs will enlarge hong kong ’ s liquidity pool and strengthen hong kong ’ s role as an international financial centre as ctcs are major users of financial services, capital markets and professional services. it is our goal to capture in particular the high value - added segments of the ctc value chain, including cash and liquidity management, corporate finance activities and financial risk management. by attracting more ctcs and corporate activities here, we will not only bolster our financial sector but also advance the development of headquarters economy in hong kong. 15. so the interests of mncs and hong kong are very much aligned. that said, we are fully aware that the competition to become the asian ctc hub is very keen within the region. there is a need to understand our competitive position, amplify our strengths and double our efforts in areas that we need to catch up. 16. for this purpose, the financial secretary tasked the hkma in 2014, with the assistance of consultants, to conduct a reality check on hong kong ’ s competitiveness vis - avis our competitors and to devise a strategy to promote hong

6. in parallel, riding on her rapid economic growth in the past decades, mainland china now has a growing cluster of home grown mncs in a wide range of sectors. chinese companies now account for 95 of the fortune 500 companies. these mncs are now flexing their muscles in the international arena, typically starting with trade and eventually venturing into mergers and acquisitions and global portfolio investment. we can safely assume that they will take even bolder steps with the supportive policies under the “ one belt, one road ” strategy, bringing new business and business partners for other global mncs. 7. these favourable macro trends are indeed good news to the corporate treasurers. yet, in shaping strategies to capture these opportunities, there is also a realization that the business environment has become significantly more challenging after the global financial crisis. 8. the quantitative easing by the g3 economies is causing wide swings in exchange rates, asset and commodity prices which have heightened the need for hedging and risk management. the ultra - low yields of their treasuries ( for example, yields of government bonds of germany and france of maturity less than 6 years and 4 years respectively are in the negative zone ) in turn has made cash management and portfolio investment difficult. the bis central bankers ’ speeches alternative of searching for yields in emerging markets has resulted in more risks to manage. the interbank market as a source of liquidity also can no longer be taken for granted. 9. compounding the challenge of treasury management is the regulatory landscape after the global financial crisis. the capability of banks in providing funding and making market for hedging tools has become more constraint due to deleveraging and implementation of the global regulatory reform, in particular the basle iii requirements on capital and liquidity. the increased market volatility has also made the raising of funds in the capital markets more challenging. 10. to stay ahead of the game, corporate treasurers need to ensure that the treasury function can be transformed to better support international growth in order to capture the immense opportunities in asia, and at the same time sharpen the management of capital, liquidity, funding and treasury related risks in order to navigate safely in the post crisis intricate market environment. 11. so, as the agenda of this summit suggests, corporate treasury management can no longer afford to remain in a passive maintenance mode, but need to adopt a proactive and strategic mode. to use a soccer analogy, an effective corporate treasurer needs to be like a good mid - fielder