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Shirley Yam

People in the financial world have big egos. They rarely volunteer compliments about a speech made by another person, especially when the speaker is Paul Chow Man-yiu, the outgoing Hong Kong Exchanges and Clearing chief executive, whose public oratory is not known for its colour or punchlines.
Yet,  on Thursday  some people did volunteer compliments. They called the final public speech by Chow at a Hong Kong Securities Institute lunch, 'honest' and 'excellent' after more than 100 market practitioners greeted the speech with a rare, if not unheard of, standing ovation.
So what did Chow say?
The 20-year exchange veteran began with some history. After the 1987 and 1998 financial crises, the government and the market sat down and worked out an overall road map that has shaped the success of Hong Kong for the past two decades.
But that is no longer the  way things are done. Discussions are issue-oriented, if not piecemeal. Initiatives are top-down with little involvement and commitment from the market.
The issues make headlines, yet Chow questioned their long-term benefit and viability for Hong Kong. 
Among them are Islamic finance against our limited  knowhow in the field; commodities futures against our lack of ability to physically deliver and sophisticated rivals like Chicago; merger with mainland exchanges against a completely different corporate and regulatory structure; carbon futures; and listing of foreign companies.
At the same time, meaningful steps forward have not been made because of the lack of an overall road map that has the support of all parties.
Those steps include the introduction of a scripless market for better efficiency, class actions for better protection and yuan-related  products for growth.
We are running out of time to make these changes. The free float of the yuan is only a matter of time. Once that happens, what reason will there be for the mainlanders to trade in Hong Kong, Chow asked.
This will be a tough battle. Yet Chow believes we do have an advantage. In 20 years, every exchange on earth will have the same hardware, but only the ones with the right culture will win. 
It's about free flow of information, capital and talent; integrity of the market and its participants; transparency and a level-playing field. This heritage belongs to  Hong Kong. 
To win 'we need a collective action', he said and called on the government, the regulators, listed firms, professional and financial intermediates to work out a road map for the city. 'Stop the finger-pointing ... and put aside the short-term interest.'
That was a speech from the heart. 
Critics may call it a mitigation letter for the passiveness of the exchange under Chow's leadership in developing new markets and in courting Beijing.
But his complaint about the lack of leadership and vision in our financial development cannot be more true. So is the frustration of the market participants aired in that standing ovation for Chow.
Let's hope the people in Lower Albert Road heard it. 
A year after the bone-shaking financial crisis, we have had no comprehensive review of the future of our market.
While the crisis  has caused the rest of the world to redefine the rules of the game, speeded up the rise of the mainland in both the political and economic landscape, and strengthened the political lobby for a stronger mainland domestic market, the administration has sat still.
In short, while the challenge facing Hong Kong has never been bigger, the administration has never been more silent. 
Yes, the government organised a small group discussion in 2007 on the development of our financial market and another even smaller group discussion immediately after the Lehman Brothers meltdown.
The first one ended with a list of piecemeal proposals and the latter with a report that consisted of nothing more than rhetoric. Both were left to gather dust.
But why? Why is a city that has  reinvented itself so many times now at an impasse? 
A reasonable excuse is that, thanks to the economic stimulus of our motherland, we have been doing pretty well. The latest crisis has not been as bone shattering as the previous two.
Property prices, the Hang Seng Index and market turnover have all returned to pre-crisis levels. There is little incentive to change.
But the honest answer is a weak leadership. While I have no reason to question Chief Executive Donald Tsang Yam-kuen's vision, our strange political structure has obviously given us a leader who has a small power base and is eager to please everybody. 
The result is a government that treasures instant cheers over long-term benefit; that evinces  difficult but necessary choices; that appoints politically loyal, if not mediocre, people to key financial positions; that fills every consultative committee with old faces according to affiliation and interest; and runs for shelter and points fingers in the face of controversies. 
To them, an overall road map requires too much effort and courage.
Yes, Hong Kong is doing fine without such a road map. But how much longer?



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