The challenge to make the domestic employment of savings both more efficient and more attractive is one which must in part be addressed at the macroeconomic and political level. But it is also be necessary to develop the financial instruments and institutions to facilitate better intermediation within the domestic economy. In scope this might include anything or everything from basic depositbased savings schemes for the small saver, through collective investment instruments, to the development or enhancement of the wholesale stock and bond markets. And, as I have already noted, there is a strong argument that the disposition of funds should be on a voluntary basis and according to market principles. All of this leads me, by what has been an extremely circuitous route, to the point which I would wish to highlight to this audience today. Getting your firm’s name onto the next tombstone for some highprofile international syndication, which may even qualify you for a photograph in one of those glossy monthlies, is all very well. But what about business opportunities to improve domestic intermediation in various countries? Of course, I am yet again exaggerating in order to make the point, for I know that most of you are already involved closely in domestic markets, not least Hong Kong’s; but the  BIS Review 52/1999  2  need for improved domestic intermediation in this region as a whole is being voiced with increasing frequency by officials of governments and international agencies, financiers and academics.
In that sense we may be a victim of our own success on the exchange rate front, although I would not wish to place too much weight on this point - it may be a viable alternative only for a minority. However, if funding needs can be properly satisfied via alternative routes, we ought perhaps to rest content. Our role at the Hong Kong Monetary Authority is to help ensure that the infrastructure will allow the market to develop if borrowers and lenders wish it to, rather than to force the pace artificially. I believe, however, that there may be a stronger underlying interest in debt instruments among prospective borrowers and lenders than is currently visible on the surface. The move to list Exchange Fund notes on the Stock Exchange and the advent of the Mandatory Provident Fund are examples of potential significant new sources of demand for debt instruments. It is a challenge for all of us to identify and exploit these and any other pockets of latent interest. The Hong Kong Monetary Authority is in regular dialogue with the Hong Kong Capital Markets Association and we maintain an open mind, and an even more open ear, to ideas which people like you may have about the development of our markets. I should mention that we have regular contact also with the authorities of other centres in the region in order that we can gain from each other’s experience in such matters.