Finally, central banks have a fundamental role in ensuring monetary and financial stability from a long-term perspective. Morocco knows that it can count on the crucial contribution of Bank Al-Maghrib, whose fiftieth anniversary we are celebrating today. The world economy can count on central banks to continue to act as anchors of stability, which are more needed than ever. The European Central Bank, for its part, will continue to be an anchor of stability and confidence. And I am pleased to note the recent proposals by the European Commission, in line with the recommendations of the de Larosière report, to establish a European Systemic Risk Council under the auspices of the ECB. Thank you for your attention. 6  BIS Review 66/2009
It has been acknowledged that at least part of the deficit may be structural rather than cyclical in nature. Although official projections suggest that the combination of cyclical recovery and disciplined containment of government spending should restore fiscal balance in due course, scepticism is understandable; this is an extraordinarily difficult field for forecasters, since the balance is the difference between two very large numbers, each comprised of many varied components. The air of uncertainty gives rise to rumours – of sweeping expenditure cuts, of asset sales, of new taxes, of higher tax rates or whatever – and to fears that Hong Kong may not be able to preserve its distinctive edge as a place with an uncomplicated tax system and low rates of tax. Concerns which arise under any of the above headings may find expression through the financial markets. Conclusions What can one conclude from all of this? •  First, a number of reasons have been enumerated as to why fiscal deficits may be a worry, both for economies generally and for Hong Kong in particular. There can be no doubt that Hong Kong's fiscal position is a matter for concern, but monetary factors should not necessarily be paramount to that concern. •  Secondly, and in the same broad context, one should beware of simplistic assertions or hypotheses about the monetary implications or, more specifically, the exchange rate implications of fiscal deficits.