The end-result is that the offending companies have been “named and shamed” by the Government and pressurised into paying billions of pounds in compensation. The reputation of these firms, many of whom are household names in the UK, has suffered as a result. This comes at an awkward time when banks in the UK and elsewhere are attempting to expand their bancassurance activities and to persuade the public to trust them with their long-term savings. Banks in Hong Kong will need to bear this lesson in mind as we embark upon the Mandatory Provident Fund Scheme. They will also have to be alive to the other types of ethical conflict that may arise as the banking environment becomes increasingly competitive and there is even more focus on the bottom line. The HKMA has already pointed out that as a result of interest rate deregulation that there will be both winners and losers among bank customers. Those with small balances and relatively large volume of transactions may find that increased fees outweigh the benefit of any increase in the interest paid on their deposits. As has happened elsewhere, banks may also become more selective in their choice of customers and the level of customer service may be affected if the number of branches is pruned to save costs. A move towards a user pays approach and a reduction in cross-subsidisation are manifestations of the greater efficiency that deregulation is intended to produce.
More people are becoming increasingly comfortable resuming activities in person, and this is starting to show up in robust consumer spending, job gains, and economic growth. So, now that we are on our second trip around the sun during this pandemic, many are looking to answer the most common question raised when traveling by car. And that is, “are we there yet?" With respect to the virus, I’ll leave that question to the public health experts to answer. But with respect to the economy, I will say this: while I am optimistic that the economy is now headed in the right direction, we still have a long way to go to achieve a robust and full economic recovery. In my remarks today I’ll set the scene for both the U.S. and global economies. I’ll also highlight a few of the factors I consider when evaluating the outlook for the economy. Finally, I’ll explain what that means for our monetary policy decisions. But before I continue, I need to give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System. Economic Outlook Let me begin by saying that despite the challenges and uncertainties we’ve faced since the pandemic took hold, the economy is now positioned to grow quickly.