Cybersecurity is the very foundation of modern banking and without it there is no point for us to boast Hong Kong as a world class international financial centre. While banks in Hong Kong have so far had very few incidents of serious cyber attacks, there is no place for complacency if we wish to maintain Hong Kong’s competitive edge as the preferred financial hub in Asia. In this connection, the HKMA has earlier this year set up a new Fintech Facilitation Office, which has taken cybersecurity as its top priority mission. Having worked very closely with the banking industry and other stakeholders, I am very pleased to announce today that the HKMA has decided to launch for the banking system a “Cybersecurity Fortification Initiative”, which is known as “CFI” in short. The CFI consists of three pillars: (a)  a Cyber Resilience Assessment Framework;  (b)  a Professional Development Programme; and  (c)  a Cyber Intelligence Sharing Platform. Let me elaborate on these three pillars. Cyber resilience assessment framework 5. We have about 200 banks in Hong Kong and they have a very diverse range of business models with understandably very different channels and modes of service delivery. Depending on the ways and technology platforms in which their businesses are conducted and delivered, the risk or vulnerability to potential cyber attacks varies from bank to bank. Needless to say, the volume and value of banking transactions conducted through the cyber world also matter a great deal.
This would directly conflict with our monetary policy, since any hedging would be equivalent to a purchase of Swiss francs against foreign currencies, which would intensify the upward pressure on the Swiss franc. Therefore the broadest possible diversification of our foreign currency investments is our sole means of reducing exchange rate risk. At the end of September, 48% of foreign currency holdings were invested in euros, compared with 60% at mid-year, with 28% invested in US dollars, and 24% in other currencies. We are continuously evaluating new asset classes and currencies in both advanced and emerging economies; this year, the SNB began investing in the South Korean won. Our goal is to further diversify our foreign currency investments and thereby reduce risk concentration. To avoid undesirable third-market effects, our entire investment activity is invariably undertaken with a high degree of prudence and caution in respect of potentially adverse effects on markets. This applies equally to inflows and reallocations of investments, as well as to the establishment of new positions. If, for example, we see ourselves confronted with very high foreign currency inflows, we might place these in sight deposit accounts at other central banks, before investing them in securities. The SNB has absolutely no interest in causing market distortions or influencing currency movements in other countries. Issues surrounding the Libor and reference interest rates I would like to conclude by exploring some of the issues in connection with the Libor rate, and the global discussion on reference interest rates in money markets generally.