Mr Roth discusses demonitisation of gold in Switzerland Speech by Mr Jean-Pierre Roth, Vice–Chairman of the Governing Board of the Swiss National Bank, at the 22nd Annual FT World Gold Conference in London on 14 June 1999. I would like to thank you for inviting me to participate in this gold conference and for the opportunity to give you some insight into the present state of the discussions on the demonetisation of gold in Switzerland. I must admit that I have accepted your invitation with mixed feelings: why play the role of trouble shooter here among people worried about the activity of central banks on the gold market? How to communicate the SNB’s intentions when its room for manoeuvre depends on a complicated political process? All this makes me dream of the comfortable situation of my colleagues in Belgium and Holland who were able to implement their strategy without outside interference and could communicate their sales as a fait accompli. I also look with envy at the Bank of England which will be able to proceed with sales shortly after the Treasury has made its intentions public.
Much attention will also be required, in the fullness of time, to make sure that the financial systems through which financial intermediation takes place are robust so that the benefits of financial liberalization could be maximized and the associated risks could be minimized and prudently managed. 3. As a financial services centre which operates with a highly liberal regime, Hong Kong has important roles to play in all this. There is not enough time to go into details here on this occasion, so I shall just identify three general areas for your consideration. 4. The first area concerns financial intermediation within individual economies, in other words, the channelling of domestic savings into domestic investments. Here Hong Kong, at this stage at least, largely only plays an advisory role. The less liberalized financial systems in this region are very much dominated by domestic financial institutions, particularly in the banking market. Further, domestic politics and a desire to protect domestic financial institutions from undue competition are such that liberalization to admit foreign financial institutions to take part in domestic financial intermediation would only proceed at a pace dictated by these considerations. For example, it will, I think, take some time and patience for Hong Kong-based banks to gain a physical presence in the mainland of China, be allowed access to renminbi banking business and command a significant share of that business. 5.