These five Principles encapsulate values that are crucial for the well-functioning of Malaysia’s financial market such as professionalism, integrity, transparency, competition and good internal governance. In addition to this, the Bank also enhanced standards for corporate governance, strengthened requirements for KLIBOR rate setting and introduced a Code of Conduct for the Malaysian Wholesale Financial Markets. These are a few recent examples of initiatives aimed at promoting greater professionalism, integrity and quality service to the public, consistent with the Hippocratic Oath to ‘Do no harm'. To add seriousness in upholding ethical standards and integrity, beginning 1 January 2018, a strengthened transparency framework for our enforcement actions will also be introduced to serve as an added deterrence against misconduct. The recent findings published by the Financial Services Professional Board, based on a 2016 survey of Malaysian banking professionals, are sobering. 23% of respondents observed that supervisors reward behaviour derived through unethical means. Another 15% expressly stated that they would act unethically when not being watched or monitored. These disheartening results are a clear manifestation that our journey is far from over and that, much more needs to be done to further strengthen the character within the banking community. There are economic consequences related to ethical choices. It is not a subject of discussion reserved only for the morally enlightened. The consequences are real. They can be dire and they can be expensive. The 2008 financial crisis alone cost the U.S. economy more than USD22 trillion.
I have chosen this topic because over the past few months, the Hong Kong Monetary Authority (HKMA), together with the Securities and Futures Commission (SFC) and the Financial Services and the Treasury Bureau, has been working very closely with the Hong Kong Association of Banks (HKAB) on what Hong Kong should do to take the private banking industry to the next higher platform. I would like to take this opportunity to share with you my views on the steps Hong Kong needs to take to develop as the premier private banking hub in Asia. To start with, I want to talk about some facts relevant to Hong Kong’s realisation of this aspiration. Hong Kong’s strengths to be a leading private banking centre Wealth in Asia-Pacific is growing exponentially. According to industry research, the region accounted for half of the growth in global wealth from 2010 onwards. In particular, China was the second top contributor to the growth in global wealth after the US.1 In 2011, there were about 30 million millionaires worldwide. Among these, about 20% were from Asia-Pacific.1 This trend is likely to continue. It is estimated that global wealth will rise 50% further by 2016.1 This is hardly surprising in that the International Monetary Fund forecasts that, emerging Asia, led by China, will contribute almost 60% of the world’s GDP growth by 2016.