Eddie Yue: What’s next in our fintech journey Keynote speech by Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority at the Hong Kong FinTech Week 2020, Hong Kong, 2 November 2020. * * * Good morning everyone. Welcome to Hong Kong FinTech Week. 1. I’ve always wanted to speak to you from a virtual stage, especially given the nature of this event. 2. This year, thousands of you are joining virtually from around the world. This surely reflects the extraordinary energy in Hong Kong’s fintech sector. 3. The rise of fintech has led some people to ask whether it will replace banks one day. I tend to think about it a bit differently: I’d like to know how technology can make banking better. Technology won’t replace banking; it will make it better. 4. There are three core principles that will always be the bedrock of good banking. These hold true for tech companies coming into finance and for traditional banks embracing technology. I’m talking about good service, customer trust, and efficient capital management. These principles have endured through the eras of the abacus, the ledger, and the first computers. They are timeless. 5. We can compare this to food – one of our favourite subjects in Hong Kong. You can eat in a Michelin-starred restaurant or a dai pai dong. You can buy food in the market and cook it yourself. You can order a take-out and have it delivered. You can eat a thousand different ways.
Limit the build-up of debt despite the need to stimulate the economy I would also like to say something about the interplay between current monetary policy and measures to mitigate the risk factors I have mentioned. Is it really justified to introduce measures that may dampen household consumption or activity on the housing market when the Riksbank is at the same time trying to stimulate the economy in order to increase  3  Several studies based on household data from the financial crisis of recent years show that highly-indebted households reduced their consumption more than households with low debts (see for example Dynan 2012, Mian et al. 2013, and Andersen et al. 2014). Studies that compare developments in different countries also indicate that high or growing indebtedness in the household sector entails higher risks to the real economy, even if the households also have substantial assets (see for example IMF 2012, Jorda et al. 2013, and Flodén 2014). 4  See Riksbank (2014b). 2  BIS central bankers’ speeches  inflation? This question is particularly relevant given that the repo rate is at zero and cannot be cut much more. I think that the question, at least in principle, should nevertheless be answered in the affirmative. It must be possible to meet financial risks with targeted measures even if this makes it more difficult for monetary policy to attain the inflation target.