But the primary justification deployed then was the need for a money market instrument, targeted at the banks as customers, to facilitate monetary management rather than the development of the bond market. Nevertheless, we adopted a comprehensive approach to the task. We put together an innovative market making system that virtually guaranteed liquidity by allowing a handful of market makers to go short in any issue of our paper for as long as their overall holdings, with suitable haircuts, are long. This has now been replaced by an even more robust arrangement whereby short positions in particular issues are squared at the end of the day through overnight repos against other issues. We also built a paperless clearing, settlement and custodian system operated by our Central MoneyMarkets Unit (CMU), which also provided similar services to the larger volume of private sector debt. And, at the same time as we introduced our Real Time Gross Settlement payment system at the end of 1996, we moved on to DvP, or delivery versus payment, with real time and end of day capabilities. Meanwhile, the supply of debt has steadily been increasing. Corporate bond issuance has increased by 300 per cent in the last decade or so. We also have an increasing variety of products, including mortgage-backed securities and retail products brought to the market by the Hong Kong Mortgage Corporation. All have been readily absorbed by the latent demand to which I also referred earlier.
What this means is that we now have, in this time zone, a robust financial infrastructure for US dollar transactions that can accommodate, among other things, a US dollar bond market in this region. You do not have to wait until New York opens before you can achieve finality of settlement of your US dollar transactions in bonds or, indeed, in any US dollar denominated financial assets, if they are lodged with our CMU in Hong Kong. Furthermore, any Asian currency with an RTGS payment system, if it is linked up with our system, will be able to achieve PvP or payment versus payment for the two currencies in real time. We already have PvP for Hong Kong dollar versus US dollar transactions the first in the world. I have, as you are probably aware, drifted into the positioning of the Hong Kong bond market for meeting future challenges. We have, through our efforts in the development of the financial infrastructure, put ourselves in a position to play the ideal host to the bond market of the region, or of this time zone. I hope members of our financial community can leverage on this position of strength and bring issuers and investors of US dollar bonds to Hong Kong. Further development of the bond market is largely in their hands. As central banking officials, we in the Hong Kong Monetary Authority have done what we can appropriately do, in the provision of this public good a robust financial infrastructure.