Lorenzo Bini Smaghi: The challenges of surveillance and coordination Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, at the International Symposium of the Banque de France: Regulation in the Face of Global Imbalances, Paris, 4 March 2011. *  *  *  Introduction There is a broad consensus that the crisis we’ve been living through the last three years is the result of imbalances accumulated both at the macro and micro level, mainly in advanced economies. Surveillance of these imbalances was clearly insufficient. Any prescription to improve the resilience of our economies must thus include a strengthening of surveillance. I will concentrate in my remarks on macroeconomic issues. There has been a lot of discussion on what went wrong with surveillance, in particular at international level. The IMF should be praised, in particular, for having its own surveillance process independently evaluated. The results of this analysis were published in January this year.1 Maybe in Europe we should follow the same transparent and open procedure to get a better understanding of what didn’t work. The recommendations offered by the Independent Evaluation Office are mainly procedural and concern the workings of the IMF. They included creating an environment that encourages candour and diverse or even dissenting views; overcoming the silo mentality; speaking truth to power; and delivering clear and consistent messages. These are recommendations which should probably be taken to heart by other institutions too.
The purpose of the HKMA intraday liquidity facility is to promote more efficient RMB payment flows between banks; and  (b)  The HKMA will also designate a number of banks active in the CNH market as Primary Liquidity Providers (PLPs). Banks that are designated as PLPs are committed to using and developing Hong Kong as the global platform for supporting their offshore RMB businesses. They are also committed to expanding their market-making activities in CNH market. In return, the HKMA will offer a repo line to each of the PLPs so as to facilitate more efficient liquidity management when they carry out market-making and other business activities in the CNH market. This bilateral repo line can be used by the PLPs as intraday or overnight liquidity management purposes. The HKMA is now finalising the list of PLPs and the necessary documentation. We hope to be able to announce the list of PLPs very shortly. Ladies and gentlemen, let me conclude by saying that the competitive edge of a successful financial centre depends crucially on its soft powers, not just on hard infrastructure. Hong Kong is uniquely well positioned to take advantage and play a pivotal role in the new era of China’s growth story and in the internationalisation of RMB. Hong Kong enjoys both first-mover advantages as well as many irreplaceable structural advantages, given Hong Kong’s very close links with the Mainland in trade, investment and finance under the “One Country, Two Systems” principle. However, there is absolutely no room for complacency.