This next Connect will ultimately offer customers across the Greater Bay Area access to Hong Kong’s world-leading 3/5  BIS central bankers' speeches  wealth management services. We are also in discussion with our Mainland counterparts about launching Southbound trading under Bond Connect. 35. Both of these developments will create great opportunities for Hong Kong as a financial centre. But we will not stop there. China’s economic growth and wealth generation, as well as global investors’ increasing appetite for RMB-denominated assets, all point towards a bigger role for Hong Kong. Our city can intermediate financial flows between the Mainland and the rest of the world for decades to come. At the HKMA, we are continuously working towards new policy breakthroughs that can strengthen Hong Kong’s ability to do that. Opportunity – Going Green 36. The China opportunity for Hong Kong is compelling. But Hong Kong must also lead the other trends shaping the future of finance. And in my view, at the top of the global financial agenda are: sustainable finance and technology. And that is where the HKMA, in its market development role, is focusing its efforts. 37. To meet the Paris Agreement climate change target, the world needs to transition to net-zero carbon emissions by 2050. That will cost an estimated one to two trillion US dollars a year, making sustainability one of the biggest drivers of capital flows in the decades ahead. 38. In Hong Kong, we are determined to be at the forefront of this transition.
The foreign banks do not themselves usually have any natural access to Swedish kronor. They therefore fund part of their lending in kronor by borrowing kronor in the short-term from other Swedish banks. However, the risk is that foreign investors will leave the Swedish market if problems arise, as the Swedish krona is a small currency. There are also reasons for believing that the number of foreign banks that act as counterparties to the Swedish banks is limited. Moreover, participating in the swap market is often not a central part of the operations of the foreign banks. This in turn has consequences for liquidity and pricing on the swap market. We saw an example of this when the last extraordinary loan that the Riksbank had offered the banks during the crisis matured in the autumn of 2010. Uncertainty then arose on the money market, and consequently swap counterparties abroad who had acquired short-term funding in kronor through Swedish banks became less willing to enter into swap agreements with Swedish banks. It thus became both more expensive and more difficult for Swedish banks to convert foreign currency into Swedish kronor at long maturities. To a certain extent, Swedish banks also act as counterparties to each other in the swaps. However, from the perspective of the Swedish banking system this is really only a matter of redistributing the maturity risk. The fact that the banks act as counterparties to each other also forges the links within the Swedish banking system even tighter.