The development of risk-based capital ratios has helped to strengthen capital standards in the more than 100 countries that adopted the Accord. In recent years, however, the Accord has exhibited serious shortcoming. One significant weakness is that the Accord’s broad brush structure may provide banks with an unintended incentive to take on higher risk exposures without requiring them to hold a commensurate amount of capital. It also has not kept pace with innovations in the way that banks measure, manage and mitigate risk. With these concerns in mind, in June of 1999 the Basel Committee released a Consultative Paper for a new capital adequacy framework. While we knew this paper would not represent a perfect framework for all banks, our aim was to release a credible package that would serve as a basis for discussion. We actively sought feedback from the industry worldwide during the formal comment period that ended on 31 March of this year, and we are continuing this dialogue. I should note that we are very pleased and encouraged by the more than 200 comments received from a variety of sources, including financial institutions, central banks and supervisors, non-G10 countries and other market participants. The respondents on the whole have sent us a strong endorsement of our overall goal of developing a capital framework comprised of three pillars – minimum capital standards, supervisory review and market discipline – that is more risk reflective and appropriate to banks of varying levels of sophistication.
With our unique advantages and strengths – including the common law system and world2/4  BIS central bankers' speeches  class financial regulations and market practices – Hong Kong will remain the leading portal for international investors seeking opportunities on the Mainland. 21. T he second trend that is creating opportunity in – and for – Hong Kong is fintech development. We already have a thriving ecosystem for finance and technology businesses here. This has been bolstered by the HKMA’s Smart Banking initiatives, which have catalysed digitalisation in the banking sector, driving faster and more efficient services for customers. I’m sure many of you are finding banking and payments much more convenient than before. 22. We will continue to work with the banking industry to apply technology to enhancing finance for customers in Hong Kong. We will explore greater use of artificial intelligence and data analytics in banking operations. We will also explore improvements to Hong Kong’s data infrastructure so that bank customers, particularly small businesses, can make better use of their own digital footprint to enhance their access to finance. And we will adopt the latest technologies for cross-border applications, such as international payments and trade finance. Our vision for Hong Kong to become a leading global fintech hub will create a wealth of opportunities for local and international players. 23. The third trend driving opportunity is green finance. Hong Kong is already at the forefront of promoting the role of finance in driving the transition to a more sustainable economy.