It is targeted at raising the bar of professionalism and integrity of participants in the money and foreign exchange markets. In line with the focus of many prudential regulators worldwide, the next phase of our efforts in strengthening corporate governance includes enhancing our supervisory toolkit to effectively address culture. Beginning 1 January 2018, the Bank will also be introducing a strengthened transparency framework for our enforcement actions, to serve as a deterrence against misconduct. At the same time, we have to be realistic. There is only so much regulation and supervision can achieve. Firstly, because enforcement actions are ex-post, occurring only after a finding of misconduct. Secondly, because not everything unethical is illegal. Morality cannot be legislated. The spirit of the law may be violated even when the letter of the law is kept. As such, while public sector efforts are necessary to ensure minimum universal standards, the values for the financial sector are ultimately solidified by private sector forces. In particular, professional bodies have a crucial role to play. This role includes – but is not limited to – promoting competence within the financial sector. Beyond training, these organisations are uniquely positioned to build for financiers, a sense of pride and societal purpose toward their vocation. The Asian Institute of Chartered Bankers (AICB) is making substantial progress in this direction for the banking profession. I am pleased to note that its flagship Chartered Banker curriculum dedicates a significant emphasis on professional ethics.
In one example, a PPI policy bundled with a mortgage – cost the customer more than £ over the term of the loan, even though the maximum amount claimable was only £ The FSA reported that this abuse stemmed from “a culture in banks and other firms that focussed on profit over customer outcomes”. Closer to our region, we saw in 2001 the unexpected failure of the Australian HIH Insurance Group, which experienced estimated losses totalling AUD 5.3 billion. This was attributed in part to a culture where the board was “unduly deferential” to management, and staff simply did not question leadership decisions. In fact, instances of failures in professionalism and integrity do not seem to have waned since the global financial crisis. According to the Boston Consulting Group, banks have paid fines amounting to USD 321 billion to regulators around globe since the crisis through the end of 2016. Instances of misconduct range widely – from the well-known rigging of LIBOR and Euribor rates, to the more recently uncovered case of Wells Fargo, where over 2 million fake accounts were 1/5  BIS central bankers' speeches  opened under a senior management who fostered “an atmosphere that prompted low quality sales and improper and unethical behaviour”. Our financial industry is not invulnerable to the ethical challenge. In the 1980s and 90s, we had cases of Malaysian banks that suffered significant losses arising from imprudent lending under ethically questionable decisions by top management.