Norman T L Chan: The power of 3Cs Address by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the Treasury Markets Summit 2012, Hong Kong, 12 October 2012. *  *  *  Good morning, ladies and gentlemen, I welcome you all to this fifth Treasury Markets Summit co-organised by the Treasury Markets Association and the Hong Kong Monetary Authority. In the past four Summits, discussions focused mainly on business opportunities available to financial market participants. This year, I am glad to note that, the Summit will also devote a session to analysing some of the fundamental elements of a first-class financial centre. Being an ardent believer of these fundamental elements, I would like to take this opportunity to share with you some of my thoughts on them. From time to time visitors from overseas come to see me and, during our conversations, the question of how Hong Kong has turned itself into a thriving and dynamic financial centre in Asia is often raised. It is not surprising that Hong Kong’s transformation from a trading port into an IFC within several decades has drawn a great deal of admiration as well as envy from neighbours within the region and beyond. This is because of the fact that an IFC will bring about much-desired economic growth, employment and prestige. So it is also not surprising that many cities in the region harbour ambitions of becoming international financial centres.
Among these firms it is common to find that they have a kind of incentive system that encourages and rewards excessive risk-taking and high sales-volume without regard to the interests of the firm or of the customers. Conclusion In my view, there is a lot that the boards and senior management of individual firms can do in ensuring that the corporate culture and incentive system encourage and nurture sound practices and appropriate values. The regulators and supervisors should also do their part to ensure that firms have in place a proper corporate governance framework. Professional and industry bodies should also play a key role in making sure that they promulgate suitable codes of conduct that define the standard of ethics and probity for their members. More importantly, professional and industry bodies should collaborate with supervisors to ensure that there is adequate policing and enforcement of the relevant codes governing ethics and conduct. Ladies and gentlemen, I would like to conclude my remarks by reiterating the importance of enhancing the power of the 3Cs, “Competence”, “Control” and “Culture”, if Hong Kong wishes to remain competitive as a world-class IFC. It is a difficult challenge, but competition is never easy. It will be a never-ending task as competition never ends. I am confident that if all the stakeholders share the same vision and work together to achieve the common goals, we can certainly make it. Thank you. BIS central bankers’ speeches  5