The threat of over-investment in the Mainland has strengthened the case for going ahead with QDII - or qualified domestic institutional investor scheme - as quickly as possible, Hong Kong Monetary Authority Chief Executive Joseph Yam says.

In his weekly Viewpoint column on the authority's website, Mr Yam said freeing up the capital account and allowing international mobility of portfolio capital would, of course, enable foreign savings to come in and would allow financial deepening.

But, he pointed out, it is important to be clear whether these steps are needed in the first place, whether the benefits justify the assumption of the associated risks and whether there is adequate risk-management capability.

Mr Yam said, in any case, the inflow of foreign savings under liberalisation could well be more than compensated by the outflow of domestic savings.

"Capital account liberalisation, if the intention is to attract a net inflow of foreign savings, may therefore have to be structured and sequenced accordingly, involving, for a time, asymmetric international mobility of capital biased towards inflows," he said.