Central bank governor of the year 1997: Central Banker of the Year: Yam – Hong Kong's sharp-shooter


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His combative approach - along with $70 billion reserves - has seen off all the currency speculators so far. But does Joseph Yam sleep easy at night?

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He rarely sleeps and he worries too much, but it seems to have paid off. Joseph Yam has successfully steered Hong Kong through what was billed as the most tumultuous year in its history.

Ironically, the transition of sovereignty from Britain to China proved a walk in the park compared with the ensuing currency turmoil that has flared across the rest of Asia. Fortunately the head of the Hong Kong Monetary Authority (HKMA) was well placed to deal with the speculation. Hong Kong's financial community has long recognized that Yam is something of a hard man. He also has a powerful armoury with $70 billion in reserves - five times the number of notes in circulation - not too mention China's chunky arsenal if need be. Nor is he afraid to spend it. In July he used $1 billion to fend off one afternoon's speculation in the Hong Kong dollar, which is pegged at 7.80 to the US dollar.

So when he shows off the HKMA's latest product, a CD-ROM, he bristles slightly at Euromoney's first question: "Can you speculate against the Hong Kong dollar on it?" He briefly laughs, and gives an emphatic "no". Yam has been Hong Kong's de facto central bank governor since 1993 when he was made chief executive of the HKMA. He was educated in Hong Kong and gained a first-class degree in economics and statistics followed by a government job in the statistical department. The 49-year-old was later fast-tracked into the Monetary Affairs branch. Since then his rise has been meteoric.

Behind Yam's chair is a panoply of photographs - friendly handshakes with the likes of Robert Rubin and Eddie George. He also is on good terms with senior figures in China. The PRC's economic chief Zhu Rongji has praised him publicly. His relationship with People's Bank of China deputy chairman Chen Yuan is also excellent. They play golf together.

Yam's achievements are too long to list in full but he has striven to build Hong Kong's domestic debt market through the introduction of a government yield-curve, has built the exchange fund, and has introduced Asia's most sophisticated interbank real-time gross settlement system. His latest project is to create a mortgage corporation along the lines of Fannie Mae in the US. He is happy in his job. "It's not everywhere in the world where you actually get the opportunity to shape a particular system," he says. "This is an opportunity you get only once in a lifetime."

Yam doesn't gamble (which central banker does?) but is a steward of Hong Kong's prestigious Jockey Club and owns a horse called Inner Circle which recently retired. Speculation abounds as to what he might call his next horse. The bets are on "Seven-point-eight", a reference to the currency peg. "There's no truth at all in this," smiles Yam. "I don't really want to bet for or against 7.8." His message is clear: nor should others.Steven Irvine