Chief Executive Donald Tsang at the Asian Financial Forum hosted by Hong Kong in September
	James Wolfensohn, Chairman of Citigroup's International Advisory Board, says China and India represent "a tectonic shift" in economic power
	Mark Machin of Goldman Sachs outlined the strengths of the Hong Kong stock exchange

Financial market regulators in Asia should join hands in curbing market volatility, says Hong Kong Chief Executive Donald Tsang. The call for effective risk management and market transparency in his opening speech at the Asian Financial Forum was timely, given the recent subprime mortgage crisis which caused unusual fluctuations in worldwide security markets. 
 
"There must be better access to reliable information for risk assessment, stress testing and increased regulatory cooperation across jurisdictions," said Mr Tsang.

The Chief Executive's views were supported by many of the financial leaders who took part in the one day event organised by the Hong Kong Government and the Hong Kong Trade Development Council (HKTDC).

Chris Legg, General Manager, Financial System Division, the Treasury of the Australian Government, said an outdated regulatory mindset is hampering capital market development in Asia. "Going forward, the challenge will be to get the region's key groupings including APEC, ASEAN plus three (10 Asean countries plus China, Japan and Korea) and others to evolve in such a way that they are seen as distinctive but mutually reinforcing elements of a wider regional architecture."

Broad potential

Mikio Kashiwagi from the Treasury Department of the Asian Development Bank said while each individual market in Asia has developed in isolation, "there is potential to make the Asian capital market a more significant player by enhancing regional cooperation." Mr Kashiwagi was on the panel discussion for the topic "Asian Treasury and Bond Markets – Where to?" chaired by the Chief Executive of the Hong Kong Monetary Authority Joseph Yam.

All panellists agreed that there has been a "tectonic shift" of global economic power to developing nations such as China and India.

"We have had this tremendous growth in China and India but developed countries such as the US and Europe still have not adjusted to the fact that it is not just a modest change in terms of global economic power but a tectonic shift," said James Wolfensohn, Chairman of the Citigroup International Advisory Board and former World Bank President. He said the new dynamics warranted a rethink that required "a high degree of understanding and discussion which is not there".

Many of the financial leaders agreed that China and India's spectacular economic growth and Asia's high savings rate point to the potential of Asia as a new fund-raising hub.

Investor protection

Mark Machin, Goldman Sachs' Co-Head of Investment Banking in Asia, said Asia's solid infrastructure with leading stock exchanges such as the Hong Kong Exchanges and Clearing (HKEx) have "internationally reputable listing, accounting, disclosure, corporate governance and investor protection standards and rules".

The mainland perspective was provided by Jia Xailong, Deputy Director of the Bureau of Enterprise Reform, and Dr Pan Gonsheng, whose US$22 billion listing of the Industrial and Commercial Bank (ICBC) received worldwide attention for being the world's largest IPO offering last year.  

"Hong Kong is the first choice among mainland companies for raising funds," said Mr Jia. "In fact, state owned enterprises made up about 37 per cent of mainland stocks listed in Hong Kong last year."