Norman Chan Tak-lam, newly appointed chief executive of the Hong Kong Monetary Authority, said there was no plan to change the currency peg to the US dollar as it was crucial for the city's financial stability. And Mr Chan said that under his stewardship, the authority would continue to promote and deepen the development of yuan business in the city. 'The peg has been established since 1983, and is the foundation of the monetary and financial stability of Hong Kong,' he said. 'The government has no plan to change it.' Mr Chan said his most important task after succeeding Joseph Yam Chi-kwong, the retiring head of HKMA, was to maintain monetary and financial stability. 'Hong Kong is now facing the impact of the global financial tsunami and the city is expected to go through challenges in the months ahead.' He added that maintaining the normal operation of the credit market and prudently managing the Exchange Fund, the reserve that supports the Hong Kong dollar, would be other priorities. Mr Chan said it was also crucial to enhance Hong Kong's competitiveness and maintain its position as a premier international financial centre, adding that developing and deepening the yuan business in the city was also important to the authority. Mr Chan also stressed that the Securities and Futures Commission (SFC), the authority and banks had tried to come to a speedy resolution on the minibonds issue. 'Let's wait and see whether there will be a concrete resolution,' he said, adding that there was a need to strike a balance between protecting investors and allowing development of the financial market. The authority had to make sure the documentation and distribution processes for financial products were properly regulated. But different financial products had to be developed as it was crucial to enhance the city's competitiveness. Chan Tze-ching, a consultant for the Bank of East Asia, said the minibonds issue had raised concerns about the supervision of banks selling investment products. He said the authority should review and fine tune its supervision to enhance investor protection but should not overreact. Mr Yam has been under strong criticism for the authority's perceived failure to monitor the sale by banks of complex investment products linked to Lehman Brothers, which lost much or all their value when the US investment bank collapsed in September. Hongkongers had invested HK$20 billion in such products. Chim Pui-chung, legislator for the financial services sector, said Mr Chan's first job should be to work with the SFC to tighten regulations covering bank staff selling investment products. The commission only regulates brokers while the authority regulates banking activities. 'The minibonds issue has shown the HKMA failed to regulate bank staff in terms of the disclosure of all the risks to investors,' Mr Chim said. 'One of Mr Chan's priorities is to work with the SFC. Ideally, he should let the SFC regulate banks' selling of investment products the same way they regulate brokerages.' Bank of East Asia's Mr Chan said the new authority chief should consider establishing a sovereign fund to generate better returns without affecting the ability of the Exchange Fund to defend the currency peg. This idea was supported by Tam Ping-shing, chief executive at Hong Leong Bank's Hong Kong branch. While the Exchange Fund's investments should remain prudent to defend the peg, Mr Tam said the authority could spin off a small proportion for more diversified investments. He also urged the new chief to strengthen financial co-operation with the mainland, particularly as the yuan becomes more influential. Legislator Chan Kam-lam, chairman of the financial affairs panel, hoped Norman Chan would enhance the transparency of the authority. 'The HKMA has a very important duty to maintain the stability of the local financial market and banking regulation. We would like to see Mr Chan make sure the banking sector remains healthy and solid.' The big issues On minibonds: I think one has to strike a very delicate balance between ... the desire to protect investors, to make sure all these documents, distribution and sales process are properly regulated, and ... the wish to develop different kinds of financial products in Hong Kong. On the linked exchange rate system: The SAR government does not have any plan to change this system. On his own salary: My salary was decided by the financial secretary ... I think this salary level is appropriate. On his wife's job with the MPF Authority: The work of the MPF Authority and the HKMA are very different ... My wife and I will each do our own job, and get the job done with professionalism.