4  BIS Review 88/2001  The second claim is that, with the Link we place the control of our monetary policy in the Federal Reserve and thus lose monetary policy as an instrument for stimulating (or restraining) the economy. In particular, we have, during the life of the Link so far, had the experience of low interest rates imported from the US when a tighter policy might have been more suited to our macroeconomic needs; and, more recently, in the aftermath of the Asian financial crisis, the opposite problem. But these misalignments are one of the trade-offs that we have to accept from time to time in return for exchange rate stability. At present, and more often than not, the US and Hong Kong economies are more or less in sync, and the interest rates we import are perhaps more appropriate for our needs than they have been at any time over the past decade. That in itself does not alter the point about loss of control of monetary policy, though it makes it less relevant and less forceful at a time like this. But the complaints about shackling our interest rates to those of the US beg the larger question of whether, if we free ourselves of that burden, we would really be able to run a truly independent monetary policy. How far, for example, would we be inhibited from reducing interest rates at times when that would be appropriate because of inflationary concerns generated by exchange rate depreciation?
Global investors’ allocations to the region have been rising, alongside Asia’s increasing weight in global indices. The region has become a favourite hunting ground for investors, in search of the next unicorns. Households and institutions in the region have themselves become ample sources of wealth looking for investment opportunities. These pools of capital can be mobilised through our capital markets, to finance the region’s high-growth enterprises. Asia has an abundance of channels through which companies and capital can meet. There are established bourses as well as newer, tech-focused exchanges. There is also a growing number of blockchain-enabled platforms. Example: DBS Bank has launched the DBS Digital Exchange for the tokenisation, trading and custody of digital assets. Singapore’s Value Proposition Singapore is well poised to become one of the leading fund-raising centres in Asia. There are four key dimensions to Singapore’s value proposition: a vibrant ecosystem for private equity and venture capital; the premier Asian hub for solutions in investment risk management; a rapidly growing debt capital market; anda promising equity capital market. First, a vibrant private equity and venture capital ecosystem. The thriving start-up and 1/4  BIS central bankers' speeches  Fintech scene in Singapore and Southeast Asia have drawn active interest from PE/VC players from around the world. PE/VC assets under management in Singapore have doubled over the last five years. They grew by over 50% last year despite the COVID-19 pandemic and recession, testament to the resilience of the ecosystem. Technology and innovation are making private equity and venture capital investments more accessible.