As I mentioned earlier, the internet shifts the balance of power from banks to the consumers by giving them increased opportunity to shop around. This has coincided with efforts by banks to switch their marketing efforts to consumer finance, credit cards and wealth management products in order to broaden their sources of income and to make up for sluggish business opportunities elsewhere. The internet should help in the cross-selling of these products to consumers, but it is not by itself a guarantee of success. The banks must also ensure that they do not alienate their customers through unfair or opaque terms and conditions. For example, in the internet context, customers should not be held liable for direct losses caused by unauthorised transactions where they are not at fault. Banks therefore need to become more conscious of the fact that they cannot take their customers for granted. They must be prepared to offer them a fair deal, and be seen to do so. This is something that we will be addressing in Hong Kong through revisions to our Code of Banking Practice. In this connection, we have recently issued for consultation some proposals on credit card practices which will eventually be incorporated into the revised Code. These include, for example, a recommendation that banks should publish standardised APRs for the cost of obtaining finance via credit cards. I will close by returning to the theme of the New Economy. It used to be said that the days of the banks were numbered.
Chart 10 Survey measure of businesses’ price expectations Balance of respondents expecting higher prices, BCC Survey Manufacturing  50  Services  40 30 20 10 0 -10 -20 -30  1997  1999  2001  2003  2005  2007  2009  2011  Source: British Chamber of Commerce  7 8  12  See Sentance (2011) for example. For example, Orphanides and Williams (2005) argue that changes in the unemployment rate provide a better guide to demand pressure than the level of unemployment because of uncertainty about the equilibrium rate of unemployment. BIS central bankers’ speeches  What we can observe more clearly is how the pricing intentions of businesses and the rate of price increases they are able to secure are responding to changes in the demand climate. And this evidence does not seem to support the view that the pressure of demand is bearing down heavily on inflation at present in the UK, even when allowance is made for cost increases. Chart 10 shows a survey-based measure of pricing intentions from the surveys conducted by Chambers of Commerce around the UK. This shows that expected price increases are currently running at relatively high levels in both manufacturing and services, and that there has been a significant turnaround in the pricing climate since the trough of the recession in 2009. Another indicator which suggests that domestic demand pressures are exerting limited downward pressure on inflation at present is the rate of inflation in the services sector.