Without doubt there is a clear break in the GDP growth trend in the USA, which has been much higher during the second half of the 1990s than during the 1970s and 1980s. The fact that this has occurred without any corresponding increase in inflationary pressure indicates that there has been an increase in the economy’s long-term production capacity. But should this really be regarded as a “new” economy? In actual fact, the growth rate in recent years does not appear unusually high when seen in a perspective of 40-50 years. On the contrary, it is the growth rate during the 1970s and 1980s which appears to be unusually low. What really makes the 1990s in the USA unique is the course of the economic upswing, its long duration and especially the developments in productivity. Growth in productivity has largely increased over time, instead of decreasing, as has been the case in previous periods of economic upswing (slide 2). There has been an intense debate among leading US economists over the past year as to whether this increase in productivity merely reflects greater productivity in the manufacture of computers and other IT equipment, or whether this IT capital also has a spread effect to other parts of the economy. No one questions the fact that productivity in the actual manufacture of computers and IT equipment has increased. There has been an increase of almost 25% a year in this field during the 1990s. The dissension concerns the spread effects. 3  BIS Review 89/2000  2.
The need for fairness and transparency Banks are at liberty to impose such fees and charges, but it is essential that they should be fair and transparent in doing so. This is particularly the case if the banks are intending to get more involved in consumer and wealth management business where it is important to retain the trust of the customer. The banks cannot afford a bad image otherwise they may find their customers going elsewhere - for example, to internet-based financial institutions. As we have seen from some recent incidents, the banks in Hong Kong have been lagging behind in the provision of clear information to their customers about the cost of some financial products such as credit card advances. Moreover, there has been recent controversy about the provisions in credit card agreements that entitle the lenders to reclaim from debtors the full legal costs and expenses of recovering overdue debts. In a recent court case, the judge ruled that the relevant provisions were unconscionable and therefore could not be enforced. We have written to authorised institutions to ask them to review their terms and conditions in the light of the court’s ruling and to ensure that they are consistent with Hong Kong law. We have also initiated a review of the Code of Banking Practice with a view to strengthening the provisions on such issues as transparency in the provision of banking services and the proper and responsible use of debt collection agents.