Welcoming Speech at the Opening Ceremony of the HKMA London Representative Office

Ladies and Gentlemen,

1. Let me begin by extending a warm welcome to all of you. We celebrate today the opening of the Hong Kong Monetary Authority's London Representative Office, and I am delighted to see so many friends of Hong Kong, old and new, joining us in this celebration. Before I brief you on the functions of this new Representative Office, I should perhaps clarify two small points. The first is that our housewarming today takes place 'off-site' in this spacious hotel. The reason for this is simple: our premises at the Representative Office are too modest to accommodate such a large gathering. I hope, nevertheless, that you will all be able to find the opportunity in the coming weeks or months to call in at our office and check it out. Its location is just a few streets away from here, above the Hong Kong Economic and Trade Office in Grafton Street. The second point is that, although we have chosen today for our opening ceremony, our official opening does not actually take place until this coming Friday, 1 October, the date on which we have informed the Bank of England and the FSA that we shall start operations. There are a number of good reasons for an early opening ceremony. Not least among them is the auspicious nature of today's date, the 28^th day of the 9^th month, or 九二八, which in Cantonese puns with something that can be translated to mean longevity and prosperity that come without difficulty. I must confess to being one of the many in Hong Kong who pay attention to these things, though I should perhaps assure the sceptics among you that the HKMA follows strictly rational principles in its daily operations.
2. Having now clarified that we have gathered here in the wrong place on the wrong day, I shall now move to the more important questions of why the HKMA needs a Representative Office in London and why have we chosen to open it now. The main consideration behind our decision is the great phenomenon of our times, globalisation, which affects all aspects of our lives, but perhaps none more so than our financial markets. With the globalisation of markets, it is extremely helpful for the monetary authority of a major financial centre like Hong Kong to maintain a round-the-clock presence to cover different time zones.
3. In 1996 we opened our Representative Office in New York, which has a twelve-hour time difference with Hong Kong. The opening of our London Office will now fill the time gap between our Hong Kong and New York Offices, and enable those of us in Hong Kong to go to bed earlier at night. The London Office will monitor European financial markets and trends in the European economies. It will also provide continuity to the Convertibility Undertaking for the Hong Kong dollar in this time zone. As you know, the Convertibility Undertaking is an essential element in our Linked Exchange Rate system: through it we undertake to convert the Hong Kong dollar Monetary Base into US dollars at a fixed exchange rate. Transactions under the Convertibility Undertaking will be handled by the small dealing room in our new Representative Office, which will operate between the hours of 10 a.m. and 5 p.m. London time from 1 October. Together, the three HKMA offices in Hong Kong, London and New York will provide twenty-four-hour coverage of the Convertibility Undertaking. This is a clear demonstration of our commitment to the monetary rule of our Linked Exchange Rate system.
4. Further functions of the London Office will be liaison with the Bank of England, the FSA, and other European regulatory authorities and the provision of a HKMA presence at various forums and other official events in Europe, in addition to serving as a liaison point for the investment managers who manage our reserves in London. The Office will also provide briefings on Hong Kong's monetary and banking systems to a range of organisations.
5. The choice of London for our Representative Office is easy to explain. The City is the largest and most active of Europe's financial markets and is one of the world's great financial capitals. The choice is an obvious one for any monetary authority seeking to establish a presence in this time zone. But for Hong Kong there are additional reasons. Our business and financial communities have long-standing, extensive, and deep relations with their counterparts in London. In particular, there are strong connections between our banking sectors. And, although Hong Kong no longer has constitutional links with the United Kingdom, the cultural links and affinities that have grown up over the years remain as strong as ever. I am confident that our new Representative Office here will play an important role in maintaining the many ties that exist between the financial communities in London and Hong Kong, and in fostering an even closer relationship.
6. My colleagues from the HKMA who have the responsibility of managing these various functions may already be familiar to many of you. But let me take this opportunity to introduce them formally. The Office is headed by our Chief Representative in London, Josie Wong. Josie is assisted by Fiona Chan and Kenneth Ko. If there is anything in which the HKMA can be of service to you, Josie and her team will be happy to assist.
7. Your presence here today is a strong show of encouragement for our new Representative Office and for the work of the HKMA generally. I should therefore like to conclude by thanking you all for your support and by proposing a toast:

"To the HKMA's London Office."

Thank you.