They should, for example, consider whether it is desirable to grow in size or develop into niche players. Neither option is an easy one. The opportunities for organic growth in the local market are limited, while competition for niche operations is intense. 2  BIS Review 37/2004  China risk The second important process is the continuing and accelerating integration of the economies of Hong Kong and Mainland China, which will be hastened in the years to come by further financial liberalisation. I have already mentioned the arrangements under CEPA, in which more medium-sized Hong Kong banks will be able to access the Mainland market. Let us not overlook movement in the opposite direction, in which more Mainland banks will seek to enter the Hong Kong market. On the macro level, as the renminbi moves at a measured pace towards full convertibility, it seems inevitable that an increasing proportion of the balance sheet of banks in Hong Kong would be denominated in that currency. The opportunities arising from the developments are promising, but they carry risks as well. The growing banking relationship between the Mainland and Hong Kong will provide important business opportunities for banks in both places. The question for Hong Kong banks seeking to take advantage of this process is whether they have the requisite expertise to properly analyse the business and compliance risks.
2 Albert Gallatin’s efforts to solidify the Hamiltonian structure and to establish fiscal discipline in the early years of the United States are less well known. 3 As you will see, they clearly merit attention. The story of Albert Gallatin provides a wonderful example of how Swiss and American politics and economics have nourished each other for centuries through the exchange of ideas and people. Moreover, Albert Gallatin’s legacy arguably provides some valuable lessons which remain relevant in the present time. Today, I would like to focus on a crucial part of Gallatin’s legacy – his strong adherence to fiscal discipline. But first, let me take you on a brief tour of Gallatin’s fascinating life story. 2. The life and achievements of Albert Gallatin  For the sake of clarity, allow me to divide Albert Gallatin’s life into four distinct periods. 1761-1788: Youth The first period covers Gallatin’s life prior to becoming politically active in the United States. Gallatin was born into a wealthy merchant family in Calvinist Geneva in 1761. He became an  1  Gallatin served 13 years – longer than any other serving Secretary of the Treasury before or since. 2  Ron Chernov, Alexander Hamilton (The Penguin Press, New York NY, 2004), provides the most recent and complete Hamilton biography.