The Riksbank has also contributed to the stability by being involved in establishing a credible regime with a low inflation rate. We have also endeavoured to make our monetary policy open and provide clear signals, with the aim of reducing unnecessary fluctuations on the market. At the same time, it is important to remember that the increasingly improved central government finances are essentially a very good development from a national economy point of view. Not even this market, which has made a good living from central government financial problems, should be concerned over this. The falling volumes of treasury papers entail new opportunities for other borrowers. "Crowding out" will now be replaced by "crowding in". This should open the way for increased corporate financing with bonds, an area where we have a good tradition. Furthermore, an increase in construction should create a greater financing need. It should also be possible to expand the part of the fixed income market that is aimed at households. The fact that the share market does not merely rain blessings has been made quite clear from developments over the past year. A clear and practical system for bonds aimed at households could be one good alternative to both shareholding and interest funds. 2  BIS Review 37/2001  It is scarcely surprising that the Swedish market is markedly different from, for instance, the Treasury market in the USA or the Bund market in Europe. The number of players is much smaller, while the depth of the market is less.
There are three ways we can achieve this: The first is by enhancing offshore RMB liquidity. As mentioned earlier, the HKMA’s currency swap agreement with the People’s Bank of China was enhanced in July. Apart from the overall increase in the size and removal of the need for renewal of the swap agreement, on the back of this, the HKMA enhanced its RMB Liquidity Facility, and the important changes include: Expansion of both intraday and overnight repos from RMB10 billion to RMB20 billion each, providing an additional RMB20 billion in liquidity to the market; Extension of the overnight repo operating hours from 6 pm to 5 am the next day (when the RMB RTGS system closes), making operation more flexible and streamlined, especially for those in other time zones; and Reduction of repo rates of the overnight repo, with the spread over CNH HIBOR lowered from 50 to 25 basis points. We will constantly monitor the need for further enhancements to keep RMB liquidity in Hong Kong at the optimal level. The second approach is to facilitate the development of more diverse offshore RMB products. The expansion and enhancement of the Connect schemes to promote the cross-boundary use of the RMB and facilitate further portfolio flows into and out of the Mainland is crucial. Southbound Trading under Bond Connect and Wealth Management Connect have created new opportunities for investors and increased the usage of the RMB in capital markets and wealth management. We will consider enhancements to Southbound Bond Connect to enrich Hong Kong’s bond market.