The political reform debate has been received by the markets for what it is: a reasoned and for the most part polite discussion of how to develop constitutional arrangements in the best interests of Hong Kong.

This is the message from Monetary Authority Chief Executive Joseph Yam in his weekly Viewpoint column issued today on the authority's website.

Mr Yam said the National People's Congress Standing Committee's recent interpretation of two Basic Law annexes should help provide a clear set of procedures for conducting Hong Kong's constitutional development in a calm and orderly manner. They have not had much of an impact on the generally positive economic trends or on financial stability, he said.

"However, outside of the purely economic and financial spheres, there are always the events and processes of a political and social nature that need to be watched. And, in an age of globalisation, these too can move rapidly from the local to the global," he warned.

The risks and vulnerabilities to monetary and financial stability appear to have substantially reduced from the situation Hong Kong has been facing since the Asian financial crisis and the bursting of the property bubble in 1998.

"I hope this benign environment can be sustained in the years to come, although we obviously should remain vigilant," he said.