Briefing to the Legislative Council Panel on Financial Affairs

FINANCIALINFRASTRUCTUREObjective: reinforce Hong Kong's role as anInternational FinancialCentreOur competitive advantage: a financialinfrastructure in which financialintermediation and o<strong>the</strong>r financialtransactions can be conducted safely andefficiently• Domestic financial activities• International financial activities• Mainland / Hong Kong financial activities13It is one of our primary responsibilities <strong>to</strong> maintain Hong Kong's status as aninternational financial centre. By bringing in more demand for financial services,Hong Kong's economy will benefit and more jobs will be created.We believe that <strong>the</strong> main competitive advantage in being an international financialcentre lies in <strong>the</strong> robustness and efficiency of its financial infrastructure. Financialtransactions have no geographical boundaries in a wired world, and will gravitate<strong>to</strong>wards a centre where <strong>the</strong>y can be conducted safely and efficiently. Our latestcontribution <strong>to</strong>wards building this competitive advantage is a sophisticatedpayment system in both Hong Kong and US dollars. We will fur<strong>the</strong>r build on thisadvantage through initiatives on three fronts:- Domestic financial activities - <strong>to</strong> link up our domestic debt, equity andpayment systems so that straight-through-processing can be achieved inHong Kong dollar transactions.- International financial activities - <strong>to</strong> provide safe and efficient clearingsystems in foreign currency transactions in <strong>the</strong> Asian time zone and <strong>to</strong>extend <strong>the</strong> linkages of our infrastructure with those of o<strong>the</strong>rs in <strong>the</strong> region,so that more international financial transactions will be attracted <strong>to</strong> HongKong.- Mainland/Hong Kong financial activities - <strong>to</strong> attract Mainland institutions <strong>to</strong>make more use of Hong Kong as <strong>the</strong> platform for conducting <strong>the</strong>irinternational transactions and <strong>to</strong> streng<strong>the</strong>n <strong>the</strong> linkage of <strong>the</strong> infrastructureof <strong>the</strong> Mainland and Hong Kong so that two-way payment and settlementwill be made more efficient.-13-