What I would like to do here is to share with you our views on the following three issues that have profound impact on the way in which the banking industry, including that in Hong Kong, should structure itself:    Universal Banking vs. Segregated Banking    Universal Banking vs. Narrow Banking    Branch vs. Subsidiary Operations. Universal banking vs. segregated banking 2. First let me talk about “universal banking”, which may mean different things to different people. By “universal banking” I refer to a business model in which banks are allowed to provide a wide range of banking and other financial services to their customers, whether they are mass retail, high net-worth, SMEs or large corporates. In this connection, it may be appropriate to regard a universal bank as a one-stop financial supermarket. 3. Hong Kong has a long tradition of this type of universal banking. Notwithstanding the experiences of the recent Global Financial Crisis and the ongoing debate and scepticism in some jurisdictions, we continue to see merit in the model of universal banking. Why? Let me explain. 4. First of all, universal banking in the form of a one-stop financial supermarket provides what the customers need to meet their rising demand for investments in a wide range of financial and wealth management products. These customers can enjoy the convenience of a one-stop service, ranging from simple products such as equities, unit trusts, insurance, gold etc. to the more complex derivative or structured products that meet their investment needs.
Recognizing this inherent risk, the HKMA, in seeking to nurture the universal banking model in Hong Kong, must continue with its long standing conservative supervisory approach with even greater emphasis on prudence under-pinned by proactive and forward looking supervision. 20. Ladies and gentlemen, this is a rather long speech and I thank you for your kind attention. Thank you! 4  BIS central bankers’ speeches