"It is difficult to find a text-book perfect market," said Yam. "We [the regulators] are not perfect. Markets do fail; market intermediation is always controversial. We learned that in 1998 [following the Asian financial crisis]."In the wake of the current financial crisis and the billions that went towards bailing out the banks, Yam had a slight dig at his Western counterparts who he said appeared to be moving from an Anglo-Saxon model to a socialist model. He was also critical of those emerging markets that promoted regulatory rules that were "unsustainable" for domestic circumstances (in other words too accommodating of foreign investors). He said such markets bred "unethical behaviour" .
The secret it seems is to get the degree of financial openness right without causing financial instability. "The financial system's primary focus is financial intermediation that supports the economy," said Yam. And not financial openness that is geared towards attracting the "top shop" names in your own backyard because those so-called "top shops" may also bring with them financial innovations, which are toxic.
Eager to point out Hong Kong redeeming features, Yam said that the HKMA had introduced RTGS for the Hong Kong dollar, euro, US dollar and renminbi with payment-versus-payment settlement which was linked to its debt clearing system. He invited market participants to become either direct or indirect participants or to link into Hong Kong's clearing and settlement systems.
With all these developments occurring in the Hong Kong market, Yam queried why it had taken SWIFT so long to restage Sibos here. "It has taken you [Sibos] 18 years to come back. What took you so long? A lot has happened here to interest you enough to have come back earlier."
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