The efforts of the city and the state, starting in the mid-1980s, to redevelop the Theatre District and Times Square area played an important role in revitalizing tourism. But, of course, the city’s well-deserved reputation for culture and arts goes well beyond Broadway—to the hundreds of Off-Broadway and neighborhood theaters, museums, music venues and organizations like yours. Supporting this cultural infrastructure is important to maintaining a vibrant economy and a bright future. The experience of New York City, which has gone from crisis to vibrancy, shows that the past need not be prologue for the future. It also shows that a well-managed regime of fiscal control can help begin the process for future recovery. Other cities and regions are at different points in this journey. Puerto Rico, for example, which has been in recession for many years and which defaulted on its debt obligations earlier this year, is at a particularly critical juncture. On the positive side, the fact that Congress has enacted legislation, the Puerto Rico Oversight, Management and Economic Stability Act, or PROMESA, does provide a way forward. The prospect for good fiscal stewardship has improved and this is an essential first step in the Island’s recovery. As I have noted elsewhere, there are significant opportunities for action that can leverage the Island’s strengths to foster economic growth. These include its bilingual adult population, an open economy occupying a central position in the Caribbean, wide experience as host to international corporations and close economic ties to the U.S. mainland.
Moreover, the aim of deposit protection is to protect small retail depositors, i.e. depositors with deposits of less than $ and DTCs and RLB do not have such depositors. However, the issue of whether their exclusion from coverage might adversely affect the business of RLBs and DTCs needs to be considered. Certainly one might argue that as the first $ of deposits of over $ with licensed banks would be covered, the same should apply to deposits with RLBs and DTCs. This is something that we will consider further in the light of the views that have been expressed. 5. Moving on to the issue of deregulation, July, of course, will see the full abolition of controls on interest rates. This is highly significant, as such controls are surely inimical to Hong Kong’s free competition ethos. Certainly this change in the status quo will provide certain challenges for institutions, but in the long run the competition, innovation and efficiency that the removal of such barriers will engender will help to keep Hong Kong’s banking sector competitive and profitable. We also, as you know, hold the view that some greater consolidation among the local banks would be desirable from this point of view, although we have not forced the issue. This is something, however, to which we would urge bank owners to give careful thought. 6. It is clear that as part of the process of deregulation of interest rates banks will be considering revising certain fees and charges. This, of course, is understandable.