I think it is fair to say that the Open University has reached its maturity as an institution under his presidency. Yet, remarkably, the momentum that has characterised the University's early years seems now to be gaining rather than slackening, with the recently announced plans for expanded services not just in Hong Kong but also on the Mainland. Professor Tam will retire with the knowledge that the Open University is in a flourishing condition and has an excellent reputation, internationally as well as locally. I join you all in wishing him health and happiness in his retirement and in wishing his successor, Professor John Leong, every success. The Linked Exchange Rate system I had originally planned to talk generally this evening about challenges in central banking. I shall certainly address this topic later on. But it occurred to me as I was preparing the talk that this week, in addition to launching Alumni Link, we also mark the anniversary of the launch of another Link, which I also participated in twenty years ago. Since that Link has again become quite topical over recent weeks, I thought you might be more interested if the focus of this talk was on the Link. Twenty years ago, almost to the day, the Hong Kong Government announced and then implemented a new policy to stabilise the Hong Kong dollar. This was at a time when the dollar had been falling in value so fast that the monetary and banking systems were in a state of crisis.
In my view, the role is quite straightforward: it is to sustain a monetary and banking environment that is conducive to resolving the economic and fiscal problems that face our community - not just in the public sector, but also in businesses and households. This is not the passive, static role that it may seem, as the maintenance of a rule-based monetary system in the form of the Link misleadingly suggests. Indeed, there is the scope - and often the need - for an active and imaginative use of financial, supervisory, communication and other skills. The degree of openness and the relatively small size of Hong Kong's financial system, against the background of globalisation, mean that the maintenance of monetary and banking stability is a particularly difficult task. There is also the requirement, implicit in the Basic Law, to look ahead, and in particular, to develop the financial infrastructure that will secure Hong Kong's position as an international financial centre and provide it with the means to build on that position. And there are other important tasks, such as seeking to help the Government in its efforts to contain the fiscal deficit by achieving a favourable return on the fiscal reserves deposited with the Exchange Fund - subject always to meeting the other investment objectives of the Fund. All of these tasks present challenges to keep me and my colleagues busy enough. But there have also been suggestions that the HKMA should take further steps to help stimulate growth.