Even in cases where the authorities managed to be innovative, perhaps to an extent not normally expected of bureaucrats, and did the right thing, there is always the easy, popular but legitimate question of why action was not taken earlier. The Political Process of Monetary Management 6. In Hong Kong, the grievances of the community are enthusiastically and effectively aired by politicians. Whether directly or indirectly elected, the politicians have the BIS Review 87/1998  -2-  mandate of the people and the people of Hong Kong are well served by them. But one of the peculiarities of the system of Hong Kong is that the politicians, although having the mandate of the people, do not actually have the authority to direct government policies. A consequence of this is that the Administration is always kept on its toes, much more so than in many other jurisdictions. There are lively debates on almost all issues of significance, not to mention those that are controversial. This obviously has the benefit of ensuring that the Administration performs to its best ability. But the inevitable disadvantage is simply that there can be too much of everything, to the extent of eroding rather than enhancing the efficiency and effectiveness of government. But this is the reality of Hong Kong today and we all have to live with it. 7. The management of any public issue of significance involves first getting the technicalities right, then explaining them patiently and clearly to all those concerned, and then handling skillfully the politics surrounding it.
This also speaks in favour of a national monetary policy and against delegation. Consequently, in my opinion, the use of foreign money would not result in better money in our country, in the current situation. At this stage, you might object that, through the minimum exchange rate against the euro, the SNB has already, in point of fact, adopted foreign money and handed over its monetary policy to a foreign central bank. Such a view of affairs would be incorrect. The minimum exchange rate is a measure which we adopted in order to fulfil our mandate in the interests of the country as a whole. The world economy is currently in an extremely difficult situation and the minimum exchange rate allows us to maintain appropriate monetary conditions and secure our long-term capacity to act. The minimum exchange rate is therefore an expression of our national policy sovereignty and the SNB’s lived independence, not a sign that we have given up our autonomy. The power of monetary policy Despite the criticism of these four proposals, I attach importance to making two things clear. First, it is absolutely possible and, as history has shown, even probable, that over the course of time the situation could change in such a way that the assessment of specific points might change. However, whatever these changes might be, the aim of the monetary order should remain unchanged – to ensure sound money in the interests of the public at large.