| Abstract | The author believes that the change of sovereignty in 1997 will mark the beginning of a new financial era in Hong Kong. Under the "one country, two systems" framework, there will be close co-operation and communication between regulators and market participants of the two mutually independent financial systems. Hong Kong will benefit enormously in this new financial era; so will China from the financial services and expertise of world class standard that Hong Kong can offer. However, two phenomena, the inadequacy of financial intermediation and the volatility in cross border capital flows, stand out in the market environment. These issues need to be addressed before Hong Kong can position itself to take full advantage of the new era. |
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