THE World Bank has heaped praise on the Hong Kong Monetary Authority, giving it the mantle of being an innovator in the region.
The authority has, however, needed to fulfil such a role. Factors like 1997 mean that it must have a liquid and credible debt market to retain the loyalty of the financial institutions which form such an important part of the territory's economy.
It also has to prove that bond markets are a feasible way of funding the region's massive infrastructure needs.
Hong Kong is not the biggest debt market in the region and nor is it likely to pose a serious threat to giants such as South Korea, according to World Bank figures.
But the World Bank sees Hong Kong as something of a role model.
'The experience of Hong Kong provides an interesting example of how, in a relatively free market economy, concerted public policy actions can effectively facilitate capital market development,' the World Bank says in an analysis of the region produced for a forthcoming conference of the World Bank to be hosted in the territory.
