JUN 2022
e-Newsletter
Interview of CEO
The Hong Kong Academy of Finance (AoF)
celebrates its 3 rd anniversary in June 2022. On this
occasion, we interviewed Mr KC Kwok, CEO of the
AoF. In the interview, Mr Kwok highlights some key
developments of the AoF in the past 3 years.
Host
The AoF was set up in 2019 to develop
financial leadership and conduct
monetary and financial research. In your
eyes, what were the major challenges to
Hong Kong financial leaders in the past 3
years?
KC
It is a cliché to say that the world has been
going through phenomenal changes. But the
changes in Hong Kong were particularly challenging in the past 3 years.
KC
The pandemic has upended the lives of many people, accelerating changes in the
way
people live and work and how businesses are done. Rising geopolitical tensions
have
heightened worries about de-globalisation, decoupling and a new Cold War. The
resurgence of inflation, triggered by supply chain disruptions and the surge in
commodity
prices, has resulted in a reversal of the exceedingly loose monetary policies
adopted by
many advanced economies and a reset in the valuation of assets.
Meanwhile, for the financial services industry, Fintech and digitalisation
trends continued
while the momentum built up rapidly in the area of green finance and ESG. These
trends
are gradually but powerfully reshaping financial services. In Hong Kong,
financial leaders
also had to deal with the disruptions caused by social unrest and the economic
slowdown
brought by the pandemic, while repositioning themselves to capture new,
longer-term
business opportunities.
Host
Could you tell us how the AoF has responded in light of these challenges posed
to
the Hong Kong financial industry?
KC
Where there are challenges, there are opportunities.
Given these changes in the macro environment,
the AoF has been focusing on three strategic
themes in its activities, namely Fintech &
Digitalisation, Green Finance & ESG, and GBA &
China. These are the areas where most of our
stakeholders are interested in and where we
could add value.
The pandemic has forced us to move most of
our activities online. But we have turned this
into an opportunity to expand our reach. We
invited a number of prominent overseas
speakers to speak to us via webinars. We have expanded significantly our list of
“Friends
of AoF”, who would be invited to our activities particularly the online events. These
efforts,
in turn, have established AoF’s name both in Hong Kong and in the region.
Through online financial platforms, we have also successfully reached a very large audience in Mainland China. Our webinar on RMB exchange rate formation mechanism and exchange rate outlook held in mid-2021, for example, attracted close to 1.16 million viewers and our June 2022 webinar on China’s property sector attracted close to 1.13 million. These webinars in Putonghua were also livestreamed in English through simultaneous interpretation in international financial platforms such as Bloomberg, giving the audience around the world access to the views of prominent Mainland Chinese speakers.
Host
Could you tell us a bit more about the new Financial Leaders Programme?
KC
Hong Kong’s long-term development requires a pipeline of financial leaders.
Therefore,
the AoF has introduced a new flagship Financial Leaders Programme to nurture
and
inspire Hong Kong’s high potential future leaders. A cohort of 20 participants
drawn from
different financial sub-sectors were admitted to the 2022 Programme. I am glad
to see
that this Programme which started in April has been receiving excellent feedback
from the
participants, the institutions that put them forward, and the Programme speakers
who
have kindly and enthusiastically supported this initiative.
Host
What about developing excellence in monetary and financial research,
particularly
applied research?
KC
The Hong Kong Institute for Monetary and Financial Research, the research arm of
the
AoF, has continued to build on the successes of a range of monetary and applied
research
programmes. An annual average of 24 monetary research working papers were
published in recent years and about half were subsequently published in refereed
journals, which speaks to the quality of these papers. More efforts have been
put into our
commissioned applied research programme, and reports published under it have
very
good download statistics. Our efforts to proactively disseminate the results of
such
applied research, including giving presentations in public fora, have built up
rapport with
stakeholders in the financial industry and raised their awareness of our
research. We have
also actively commissioned researchers from Mainland China to produce policy
reports on
issues instrumental to the further development of Hong Kong as an international
financial
centre (IFC).
Host
Are you worried about Hong Kong’s future, which is so dependent on our ability
to
attract talents?
KC
Hong Kong’s role as an IFC and the unique bridge connecting Mainland China and
the rest
of the world remains intact. There have been concerns about talents leaving Hong
Kong
because of emigration or our relatively tight quarantine measures. From my own
observation, the latter seems to be a bigger, yet temporary problem faced by
financial
institutions. I am sure the government will keep reviewing its policies to make
Hong Kong
an attractive business and financial hub. In any case, pandemic and quarantine
measures
come and go but the long-term business prospects for Hong Kong remain very
promising.
I have seen waves after waves of people leaving Hong Kong in the past few
decades. But
talents are always attracted to Hong Kong when the opportunities present
themselves.
Host
The AoF is still a young organisation. As it steps into its 4th year, where do
you
think the AoF is heading?
KC
Thought leadership has always been an important dimension of IFCs. We will continue our efforts to develop the AoF into a reputable
platform for
insightful discussions on economic and financial issues related to Hong Kong,
China and
Asia. Such efforts are in line with our mission in serving as a centre of
excellence for
developing financial leadership and a repository of knowledge in monetary and
financial
research, including applied research. The activities and programmes we organise
and the
research we do will help build the intellectual capital that Hong Kong needs to
remain as
the leading IFC in Asia.
AoF 3rd Anniversary Video
Financial Leaders Programme
We kick started the inaugural Financial Leaders Programme with a welcoming session on 30
March. A total of 13 local and overseas distinguished leaders have been invited to meet and
share their insights with the 2022 cohort members. The cohort had interactive dialogue with
these distinguished speakers on a wide ranges of topics, including the role of Hong Kong as
an
international financial centre, Greater Bay Area integration; RMB internationalisation; the
short
and longer term outlook for the global economy in the midst of geopolitical shocks; Sino-US
relations and globalisation; ESG; fintech and innovation; Central Bank Digital Currency; the
transformation and policy choices of Mainland China property sector, etc. Details of the
sessions
are available at
https://www.aof.org.hk/flp/programme-highlights/2022-cohort
1) Welcoming session on 30 March
2) Dialogue with Richard Lancaster, CEO of CLP Holdings Limited
3) Dialogue with Eddie Yue, CE of HKMA
Distinguished Speakers Series
Prof Michael Spence, Nobel Laureate in Economics
The AoF held a webinar on 3 May 2022 under our Distinguished Speakers Series, featuring Prof
Michael Spence, Nobel Laureate in Economics and International Adviser of AoF. Mr Norman
Chan, Senior Adviser of AoF and former Chief Executive of Hong Kong Monetary Authority,
moderated the webinar.
Prof Spence shared his insights on many current and long-term macroeconomic issues,
including Sino-US relations, globalisation, monetary policy and stagflation. Over 500 local
and
overseas participants from the financial services industry and regulators and the academia
joined the webinar.
(Top left) Prof Lawrence Lau, Fellow of AoF and Ralph and Claire Landau Professor of Economics of the Chinese University of Hong Kong; (Top right) Ms Tao WANG, Chief China Economist and Head of Asia Economics of UBS; (Centre) Mr Benjamin Hung, Chief Executive Officer, Asia of Standard Chartered Bank; (Bottom left) Ms Nisa Leung, Managing Partner of Qiming Venture Partners; and Mr KC Kwok, CEO of AoF raised issues for discussion during the Q&As session.
HKIMR x AoF Expert Speakers Series
Joseph Yam, AoF Fellow
Huang Yiping, Peking University
The AoF and the HKIMR co-hosted a webinar on “Macroeconomic Developments, Fed Tightening
and Offshore RMB Market Development” with Mr Joseph Yam, AoF Fellow cum former Chief
Executive of the HKMA and Professor Huang Yiping, Sinar Mas Chair Professor of Finance,
Deputy
Dean of the National School of Development of Peking University on 12 April. The speakers
discussed China's growth and inflation prospects, monetary and fiscal policies, RMB
internationalisation and RMB offshore market development. It was live-streamed at Bloomberg
terminals in English, and Wind terminals as well as major Mainland financial and economic
platforms such as 百度財經, 每日經濟新聞, 第一財經, 新浪財經 and 鳳凰財經 in Putonghua.
Reporters from both local and international media have signed up for the webinar. There are
over 0.84 million views online.
Qin Hong, Renmin University of China
The AoF and the HKIMR co-hosted another webinar on 24 June titled “China’s Property Sector –
Transformation and Policy Choices” featuring a prominent speaker Ms Qin Hong, Senior
Research Fellow, National Academy of Development and Strategy of Renmin University of China.
The webinar was moderated by Dr Wang Tao, Head of Asia Economic Research and Chief China
Economist of UBS. During the webinar, Ms Qin shared her insights on the driving forces, the
nature and the shape of China’s property sector’s structural transformation. In
addition, she
discussed what the short-term and long-term policy options are. There were close to 1.13 million views from the event's main platform, Bloomberg terminal, Wind terminal as well as some major financial and economic platforms in Mainland China.
Collaborative Event
AoF x CPA Australia Joint Webinar -
Opportunities and Challenges of the Wealth Management Connect
The AoF and CPA Australia co-organised a webinar on 15 June 2022. Many thanks to AoF
Member Mr Samuel Lung in serving as the moderator of the panel discussion where speakers
shared their views on the latest development of the Cross-boundary Wealth Management
Connect Scheme in the Greater Bay Area. Launched in September 2021, the Scheme facilitates
mutual market access between the capital markets of Hong Kong, Macao and the Mainland,
allowing residents in the Greater Bay Area to invest in wealth management products
distributed
by banks through cross-boundary investment accounts. More than 450 participants attended
the webinar.
(From left to right) Mr Samuel Lung, Partner, Greater China Financial Crime Compliance
Leader, Financial
Service Advisory, Ernst & Young; Mr Daniel Leong, Head of External, Hong Kong Monetary
Authority; Mr Arnold
Chow, Deputy General Manager, Personal Digital Banking Product Department, Bank of China
(Hong Kong)
Limited; and Mrs Sally Wong, Chief Executive Officer, Hong Kong Investment Funds
Association
HKIMR Research
1) Climate Risk: Definitions, Measurement, Current Practices and Regulatory Oversight
The Alliance for Green Commercial Banks launched its first thought leadership paper
entitled
Climate Risk: Definitions, Measurement, Current Practices and Regulatory Oversight
in
collaboration with the HKIMR in June 2022.
The key takeaways of the thought leadership paper are as follows:
-
Climate risk can disrupt financial institutions’ operations, lending and underwriting activities, and investments in affected securities. Research findings show that it also affects the prices of real estate, equities, and bonds.
-
Various climate risk indicators and scenario-based methods are being developed to measure climate risk. However, challenges still exist due to the availability, reliability and comparability of data and methods.
-
Regulators are developing mandatory and standardised climate risk disclosure frameworks. Climate stress tests are being conducted to assess the resilience of the financial system to climate risk.
-
The paper also highlights the importance of raising the awareness of climate risk, adopting a holistic and coherent approach to address climate risk, and developing capabilities in capacity, resources, and expertise to face challenges that climate risk may pose in the future.
The thought leadership paper can be viewed
here.
2) COVID-19 and the Operational Resilience of Hong Kong’s
Financial Services Industry: Preliminary Considerations
from the
2020-2021 Experience
The HKIMR released a new Applied Research report on
COVID-19 and the Operational
Resilience of Hong Kong’s Financial Services Industry: Preliminary Considerations
from
the 2020-2021 Experience
in June 2022.
The key takeaways of the report are:
-
Our survey finds that 85% of financial institutions had incorporated pandemics in their business continuity plans before 2020, and some adopted hybrid work models in 2020-2021.
-
Policy support, financial and data infrastructure and the accelerated adoption of financial innovations have played a critical role in helping financial institutions enhance operational resilience.
-
Survey respondents viewed hybrid work models and digital channels to become increasingly important. They would also continue to adopt financial innovations and support industrywide data sharing initiatives.
The full report can be viewed here.
3) HKIMR Working Papers
Since January 2022, the HKIMR has published 9 working papers on relevant topics in
monetary
and financial economics. Among them, 5 papers examined financial market risks in
turbulent
times, such as during the COVID-19 pandemic, with the aim to provide some preliminary
considerations of risk management for market participants. Another 2 papers studied the
global
linkages of COVID-19 lockdown and climate transition respectively, illustrating how the
impacts of
these events transmitted from one economy to another. All HKIMR working papers and their
non-technical summaries can be viewed here.
The HKIMR has also hosted two Research Webinars as follows:
HKIMR Webinar – “Lockdown Spillovers” on 26 April 2022
by Peter Tillmann, Justus-Liebig-University Giessen
HKIMR Webinar – “Dynamic Asset-Backed Security Design”
on 26 May 2022 by Kathy Yuan, The London School of Economics and Political Science
Upcoming Events
26 jul
Distinguished Speakers Series
Speakers:
Lord Mervyn King
Former Governor,
Bank of England
Moderator:
Mr Norman T.L. Chan
Senior Adviser, AoF