Governor's Statement
Speeches
01 May 1999
Governor's Statement
Joseph Yam, Alternative Governor, Hong Kong, China
(Speech at the 32nd Asian Development Bank Annual Meeting, 30 Apr - 2 May 1999, Manila)
- The past year has been very difficult for most of Asia. What
happened has been so well documented that there is no need for me
to spend time describing how the region has suffered under
financial turmoil. But I must record Hong Kong's appreciation of
the significant part the Asian Development Bank has played in
helping economies in the region to cope with the most difficult
financial and economic circumstances that we have seen for many
years. There is of course still much to do before the region is
firmly on the path to recovery again. I am sure the Bank will
continue to play a vital role in turning the Asian Mess back into
the Asian Miracle that we used to know.
- I have three short suggestions for the Bank in its pursuit of
this noble task. First, as we all know, international finance has
outgrown the international financial architecture and this has been
manifested in domestic financial systems of a number of Asian
economies not being able to cope, resulting in financial meltdown.
Financial restructuring and financial market development are of top
priority if economies are to get out of their present difficulties
and if the chances of financial turmoil recurring are to be
reduced. The Bank knows Asia and is in a very good position to
provide the necessary technical assistance. I would therefore like
to call for more emphasis in this area of work and for close
monitoring to ensure greater effectiveness.
- Second, the Bank should make more effective use of its limited
resources through a higher degree and a greater variety of
leveraging. I am not exactly suggesting that it should follow the
footsteps of the highly leveraged institutions, such as LTCM. But
there should be scope for some prudent increase in leverage, for
example, through more equity participation and the provision of
credit enhancement services for debt issues.
- Third, there is, I think, consensus in the international
financial community that the timely disclosure of accurate
financial information is crucial to the proper functioning of
financial markets. Opaqueness undermines liquidity and breeds
volatility. Transparency encourages confidence and attracts
investment flows. The Bank should therefore aim at fostering this
transparency in its lending operations and other forms of
assistance.
- Mr. President, I am confident that the Bank, under your
leadership, will play a leading role in helping Asia through this
difficult period.