To do otherwise may in the long-term be inconsistent with the objective of creating shareholder value. What this means in practice is that in imposing new charges, banks need to be sensitive to the impact on their customers and particularly on the more vulnerable members of the community. It is important to offer customers options for how they can access banking services and at what cost, and to provide them with information about these options and the associated charges. I am pleased to say that the banks that have so far announced new charging policies have borne these considerations in mind. We  2  BIS Review 29/2001  intend to give this further underpinning through revisions to the Code of Banking Practice that will lay particular stress on the need for transparency in the setting of charges. There have been calls from some quarters in Hong Kong that the HKMA should regulate banks’ fees and charges. This is not something that we want to get into. The only role for the HKMA would be if it appeared that the banks were engaging in collusive, anti-competitive practices in their charging policies. There is no evidence of this as yet, and given the way in which banks compete in other business areas, the risk of collusion seems quite low. Indeed, a number of banks have already said that they will not impose new charges, for the time being at least. Nonetheless, this is something that we will keep an eye on.
We are in fact already in the process of reviewing the question of whether the HKMA should play a bigger role in consumer issues, and if so what powers and resources we would need for this purpose. It is too soon to say where this will lead, but I stress again that we have no desire to get involved in the regulation of fees and charges. Deposit insurance Let me now turn to the other major plank of our reform package, which is equally, if not more, controversial. I am referring to the proposal to introduce a deposit insurance scheme (“DIS”) in Hong Kong. In a sense, this can be seen as the other side of the coin to deregulation. Increased competition in a deregulated environment may give rise to increased risk and therefore it seems right that we should look again at the arrangements for dealing with banking failure, should it occur. Let me hasten to add that we have no reason to believe that such a failure will occur. The banking system in Hong Kong remains profitable and robust, despite the challenges that it faces. Our system of banking supervision is also generally reckoned to be effective. But banks can still get into difficulties because of risks that supervision may not be able eliminate. There is always the possibility of external shocks or unfounded rumours that may damage confidence in a bank.