Hong Kong can play a vital role in promoting the Mainland's financial development, Monetary Authority Chief Executive Joseph Yam says, adding the city has sound banking and currency-management systems and the most advanced fiscal fundamentals in the region.

Meeting reporters, ahead of his September 30 retirement date, Mr Yam said Hong Kong's challenge was to develop mutual, complementary and interactive relations with the Mainland to maintain its status as a global financial centre.

"Under 'One country, two systems', [we] have two financial systems in one country. There is scope for maximising synergies. There is scope for addressing weaknesses and exploiting strengths. I don't think we have done enough of that for the benefit of a country as a whole. I think there are many roles that we can play to enhance financial efficiency for the country and let us work on that based on the model that we have actually created," he said.

Besides a better connection between the two different financial infrastructural systems, Mr Yam believed with the renminbi's bright prospects, Hong Kong can also boost its role in using the currency as a transaction unit.

He believes it will be of mutual benefit should the Mainland use Hong Kong as a pilot base to test its potential in developing a free market economic policy.

Monetary stability maintained

Having worked  with the authority for 16 and a half years, Mr Yam said it has been able to introduce measures to prevent market fluctuations and crises, or reduce their impacts. The linked exchange rate has also been effective in maintaining monetary stability, so he believes changes are unnecessary.

Good communications with the media and the market have helped enhance market confidence and facilitate risk management, he added.

Noting his intense interest and passion in monetary affairs, Mr Yam said he would be glad to contribute in this area to Hong Kong or the Mainland in future. He was confident Chief Executive (designate) Norman Chan will be a good successor.