Sure enough, there are indeed a few cases of inadequate disclosure or mis-selling, which the financial institution concerned should remedy. But there are others where the customer has failed to exercise basic due diligence. These are the most painful letters to read:   of investors who were attracted by headline returns and purchased products without reading any of the product documentation;    of investors who willingly signed blank sheets of product assessment forms without realising what they were buying; and    of investors who insisted on buying risky products even though they were advised that the products were not suitable for them. It is very difficult to help in cases like these. MAS will continue to explore ways to equip investors with core financial capabilities. We are currently studying the feasibility of establishing a financial literacy institute to complement existing MoneySENSE initiatives through talks and workshops to reach a larger segment of the population. We are also reaching out more to students, through the schools. The objective is not so much to instill technical expertise in investment products, but to inculcate good money habits from a young age – being prudent, being alert to risks, being clear about the objectives of investing. BIS central bankers’ speeches  5  Dispute resolution Even with well-informed consumers, occasional disputes with those who sell investment products will be inevitable. Hence the final area of investor protection is to provide an affordable and accessible dispute resolution mechanism for aggrieved investors.
While several emerging economies have successfully relied on macro prudential measures to contain the formation of such asset bubbles, the foreign exchange market is not like any other market. With a daily transaction amounting to USD4 trillion, it is the most liquid and dynamic market in the world. The role of sentiment and expectations has resulted in a market that is frequently prone to excessive movements and overshooting. As highly open economies, disruptions and disequilibrium in the foreign exchange market have far reaching consequences in the real economy. Intervention operations to maintain orderly market conditions reinforced by sterilisation operations have aimed at ensuring liquidity in the market and at ensuring that the market conditions reflect the underlying economic fundamentals. Similar to the presence in other financial markets, this is to ensure the sustainability of the efficient functioning of the market. Central banks and crisis containment and management The world going forward is likely to continue to be affected by financial crisis. History has shown that there have been more than a hundred distinct banking crises in this recent two decades. The prospect of surviving such a crisis is not only about building resilience but also having the capacity to manage it. Central banks have a critical role in crisis containment and management, in particular, to provide liquidity, to restore the efficient functioning of financial markets, to lead resolution programmes and to restore confidence to the financial system.