As this new era of RMB internationalisation has just begun, we still have a long, long way to go as the offshore RMB markets continue to grow and mature, while the capital account controls in Mainland China are being gradually relaxed or lifted. In the early stages of this new era, the primary task of Hong Kong is to develop the CNH market and at the same time work with other financial centres such as Sydney, London or Paris to grow the pie, leading to win-win outcomes. As we move into the more mature stages of the internationalisation of RMB, the available policy headroom should be quite ample for the markets to flourish. At that time, the 2nd and 3rd elements of PIPs, i.e. Infrastructure and People/Products, would matter a great deal more if Hong Kong wishes to retain its competitive edge over the others. It will be up to our industry, financial firms and market practitioners to out compete the other centres in terms of product innovation and distribution of various financial products and services that best serve the needs of their clients. I am sure that the TMA, with the support of its members and the financial industry, will continue to play a leading role in developing the professionalism of the practitioners and in facilitating product innovation. Thank you. BIS central bankers’ speeches  3  4  BIS central bankers’ speeches  BIS central bankers’ speeches  5  6  BIS central bankers’ speeches
Addressing the problems and challenges at an earlier stage will contain the deterioration, and will enhance the prospect for a positive solution. As our economy evolves and transitions towards higher value added activities, the financial support services that is being provided by the financial institutions also needs to evolve. Financial institutions have to recognise that SMEs will increasingly become specialised and diversified, and will require a much more customised and differentiated financial services. Financial institutions will also need to broaden their dimension to look beyond the traditional business activities and be positioned be able to provide financial services to businesses in new areas of growth such as green technology, medical sciences, and information technology. Today, the true value of companies is also not just measured by their tangible assets, but also includes their intellectual capital. The adoption of more dynamic methodologies to assess the businesses value should therefore be beyond collateral and historical performance. For this, financial institutions have to continuously be ahead of innovation and the new growth areas to be able to take into consideration the new related risks in their assessment. Technology will also have a vital role to support efficient services and greater outreach. Financial institutions should also encourage technological enhancements by SMEs through the provision of financing, including adoption of end-to-end supply chain management solutions and greater expansion into regional production networks. On this note, let me take this opportunity to congratulate Institute of Bankers Malaysia for the launch of this book. I applaud the initiative undertaken.