Arthur Yuen: Remarks Discussant´s remarks by Mr Arthur Yuen, Deputy Chief Executive of the Hong Kong Monetary Authority, at the AMPF 2021 and MAS-BIS Conference on Macro-Financial Stability Policy, 28 May 2021. * * *  Opening 1. It gives me great pleasure to share my views on Hong Kong’s experience in the use of macroprudential measures to safeguard financial stability. I am grateful to Mr (Robert) McCauley and Professor (Catherine) Schenk for their research efforts, and their recognition of the effectiveness of the macroprudential measures implemented by the Hong Kong Monetary Authority (HKMA) since the 1990s. The importance of macroprudential policies 2. Today’s discussion on macroprudential policies is timely considering recent market developments. The accommodative monetary policies adopted by major economies in response to the COVID-19 health crisis have provided renewed impetus to rising property and asset prices in many markets. How to rein in asset price inflation and prevent it from endangering financial stability in the event of an abrupt price adjustment is a topical issue within the central banking community. 3. As mentioned in Robert and Catherine’s joint paper, the HKMA’s macroprudential measures on mortgage lending were first introduced in 1991. They have helped Hong Kong weather several crises including the Asian Financial Crisis, during which property prices plunged by as much as 70% between 1997 and 2003. Being an early adopter, we are encouraged to see that macroprudential measures have gained wider international acceptance after the Global Financial Crisis (GFC).
The operators of these systems are supervised as banks by the Swiss Federal Banking Commission (SFBC). Cooperation between the SFBC and the SNB is facilitated as the provisions in the Banking Act and the requirements stipulated by the National Bank Ordinance are partly similar, and both authorities wish to minimise the regulatory burden. This is also in the interest of the systems that are subject to oversight. I should add that not only the SFBC, but all of the evaluated systems have the opportunity to comment on our classification. The classification will be finalised at the beginning of next year. Basel II: a never-ending story? The National Bank is involved in the implementation of the recommendations on the international convergence of capital measurement and capital standards, known as Basel II. The National Bank does not only provide a member to serve on the Basel Committee on Banking Supervision. As an authority committed to system stability, it also shares the responsibility of adequately implementing the Committee’s recommendations. The SFBC’s fundamental hypotheses are undisputed, namely that the current provisions are in need of reform and that the recommendations of the Basel Committee are to be implemented with  1/2  moderation, while at the same time any dilution of the capital adequacy requirements aimed at reducing the insolvency risks has to be avoided. We are confident that the parties directly involved, ie the SFBC and the banks, will again succeed in agreeing, within the given time frame, on pragmatic and acceptable solutions.