HKMA urges Asian Development Bank to facilitate regional financial intermediation

The Asian Development Bank (ADB) should devote greater effort to assist members to develop their financial sectors to facilitate effective financial intermediation in the region, said Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority (HKMA).

Mr Yam was speaking for Hong Kong at the 30th Annual Meeting of ADB held in Fukuoka, Japan, today (12 May 1997).

“The Asian Region is no doubt entering a new era of financial integration. In this new era, I believe the Bank’s role will need to evolve from predominantly a financier of development projects to become more of a catalyst in the development process,” said Mr Yam.

Development of the financial sector, in particular the financial infrastructures, “are essential, on the one hand, to facilitate effective financial intermediation, both domestically and on an international dimension, in order to channel scarce resources efficiently to fund and sustain future growth. On the other hand, they will also help to promote macroeconomic stability against an environment of volatile capital flows brought about by financial liberalization in member countries,” said Mr Yam.

Mr Yam noted that the ADB extended only five loans in 1996 amounting to a total of US$213 million for the development of the financial sector. These numbers would appear to be “rather insignificant” in the context of ADB’s overall activities, said Mr Yam.

Noting that the Bank celebrates the 30th Anniversary this year, Mr Yam said : “Confucius said that on reaching 30 a person comes of age ... As one goes beyond 30, interpreting Confucius liberally, one gains in adaptability to changing circumstances, so that by the age of 40 one is not easily thrown off guard by changes ... I am sure under (ADB President Mitsuo Sato’s) leadership, the Bank’s adaptability to changing circumstances will be enhanced.”

(Note to editors: Full text of Mr Joseph Yam’s speech will be boxed at the GIS)

Hong Kong Monetary Authority
12 May 1997