From time to time, we meet with stakeholders across the value-chain to gather practitioners’ views as to what the market needs in order to develop further. We will continue our work in this regard. Private banking One area we know we can improve is private banking. This is a business area that is growing exponentially in the region. According to industry research, Asia-Pacific has accounted for half the growth in global wealth from 2010 onwards. It also has a fifth of the world’s millionaires. And these numbers will get bigger, with global wealth expected to rise 50% by 2016. So, the opportunities for our region are enormous. We must ensure we have a regulatory framework that recognises this, one that is user friendly to private banking clients, yet sufficiently robust to provide appropriate investor protection, as well as being on par with international standards. To achieve this, we’ve recently introduced some refinements to our regulatory arrangements, following consultation with the industry. These measures were announced in June, so I’d just like to very briefly recapitulate four of the key points as follows. First, while we want to ensure appropriate protection to all investors, it is reasonable to treat private banking and retail banking clients differently in the investment process. So the first change is that we have provided an expanded definition for “private banking customers” that caters much better for the operational needs of private banks.
We already have the largest number of overseas asset managers seeking to invest in the financial market in Mainland China through the Qualified Foreign Institutional Investors (QFII) framework. We are also the first springboard for asset managers from the Mainland seeking to grow their overseas footprint. In order to attract business from asset owners, asset managers are increasingly realising they need to demonstrate their commitment to Asia. One of the main and direct ways is by  4  BIS central bankers’ speeches  setting up an office in Hong Kong. This has also cascaded further down the value-chain, with a growing number of service providers also moving here. However, despite these strengths and advantages, we cannot afford to be complacent. We know, for example, that Hong Kong’s asset management industry needs to become more diverse, with more high-value jobs. Of our asset management employee base, the vast majority are currently in sales and marketing, with only 10% in core asset management functions such as fund management, research and trading. This compares to over a quarter in the UK and US. So to capitalise on the opportunities ahead, a top priority must be to develop our asset and wealth management sector. That’s why, in partnership with asset managers here and around the world, the HKMA has been exploring how to improve our international competitiveness, including through a more favourable operating and regulatory environment.