Norman T L Chan: Hong Kong as a risk management hub Welcoming remarks and keynote speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Treasury Markets Summit 2019, Hong Kong, 16 September 2019. * * * Ladies and gentlemen, 1. About 15 years ago, a senior banker suggested to me that, in order to further promote Hong Kong’s position as an international financial centre (IFC), we should turn Hong Kong into a “risk management hub” in Asia. However, he did not elaborate further at the time on exactly what he meant and how this could be achieved. To be honest, it was not clear to me then what this risk management hub idea was all about. 2. Now looking back, I realise that, even without us consciously pursuing the idea as a policy objective, Hong Kong has already made major accomplishment as the “risk management hub” in Asia. Let me explain. Prerequisites for a Risk Management Hub 3. Clearly an important pre-condition for a risk management hub is to have money or capital flowing through Hong Kong. In this context, it is important to distinguish genuine financial flows from those that are not. Many of you may recall that, in the 1990s and prior to the Asian Financial Crisis, many Japanese (regional) banks used Hong Kong to conduct the socalled euro yen businesses, through which the banks would book in Hong Kong their yen loans to borrowers in Japan, presumably to benefit from more favorable tax treatment.
All in all, the financial industry should seek to collaborate with the regulators, more as partners than as adversaries, in developing risk management framework and practices that are most suited for Hong Kong’s circumstances and needs. There is no one-size-fits-all solution for risk management and Hong Kong must find its own path to success by learning from the best practices elsewhere and by striving to upgrade on a continuous basis. Finally, may I wish all of you a fruitful and productive time in today’s Treasury Markets Summit! Thank you. 4/4  BIS central bankers' speeches