I have, since those events, heard two views that, as a central banker responsible for financial stability, give me considerable concern. The first is that there was ‘nothing really to see here’. After a brief period of disruption, understandable given the nature of the shock, markets returned to normal and indeed were able to support the economy through the pandemic. Implicit in that view, of course, is that absent central bank intervention markets would have returned to order and stability. I simply do not believe that is the case. One cannot of course know for certain what would have happened if central banks had stood aside. But by the time central banks were forced to step in, market flows had become almost entirely one way. In a period of huge uncertainty, once the flight to safety had become a dash for cash, there was no-one other than central banks able and willing to step in to catch the falling knife. Absent the massive intervention I described above, core markets would have continued to seize up and the liquidity crunch would have become worse. Indeed, though concerned with bank rather than market liquidity, the experience of the Great Financial Crisis was certainly that once powerful and adverse liquidity dynamics set in, they do not go away by themselves. The second view that gives me some concern is that in a severe shock, in a tail event, it is the role of central banks to underpin market liquidity.
All these underpinnings shape what we are, namely Asia’s leading international financial centre (IFC), asset management centre and risk management centre. And it’s also this broad-based leadership that makes Hong Kong well placed to help the Mainland achieve the objective of promoting RMB internationalisation, while at the same time further reinforces our status as an IFC in the process. This is precisely the mutualism I just referred to. 8. At this point it’s worthwhile to first take stock of where we stand as an offshore RMB hub: • We have the largest offshore RMB pool of over RMB800 billion, providing liquidity support to globa Hong Kong is a trade settlement hub, processing RMB6.3 trillion in 2020, up 18% from 2019, and c to date. •  •  •  Hong Kong continues to maintain its top position in offshore RMB FX trading, with an average daily t in April 2019 according to the latest BIS Triennial Survey. This is equivalent to 30% of global trad Mainland. The city has maintained its leading position for RMB SW IFT payments, with more than 70% of glob processed through Hong Kong. The dim sum bond regained momentum in the recent few years after a slowdown in issuance arou witnessed encouraging developments over the past few years, such as with the regular bond and bill of Finance and the People’s Bank of China (PBoC). The upcoming issuance by Shenzhen municipal g yet another new category of Mainland issuers. Time to give internationalisation another push 9.