There is a big difference though between a bank and a supermarket – you don’t entrust a supermarket with your hard-earned money or life savings; and if you are enticed by a supermarket promotion to buy something you don’t need, the loss is unlikely to be huge but this may not be case for investment or insurance products. You could lose your shirt. Therefore bank customers require protection not only on the safety of their deposits, but also in the way that they are treated as consumers and as investors. In terms of protecting the safety of customers’ deposits, the HKMA seeks to maintain prudential soundness of individual banks. We do this through the regulation and supervision of banks and, in the unfortunate event of a bank failure, through the activation of the Deposit Protection Scheme to safeguard customers’ deposits up to half a million Hong Kong dollars per depositor. In  BIS central bankers’ speeches  1  today’s speech, I propose to focus not on prudential supervision but on the protection of bank customers as consumers and investors. How do we protect bank customers? So the next question is : How do we protect bank customers as consumers and investors? The answer is the very same principle: “treat your customers fairly”. Now let me elaborate on how this can be achieved. First of all, when selling a banking product, such as a loan or a credit card the bank must ensure that the key terms and conditions are fair and equitable.
I think that makes sense for banks, but we’ve come to the view that it is really not relevant for credit unions in the UK. We also want to avoid discouraging growing firms, and are confident of our ability to manage the failure of smaller credit unions smoothly with our colleagues at the FSCS. Therefore we are launching a  9  For more background on this work, see https://www.bankofengland.co.uk/working-paper/2017/the-determinants-of-uk-credit-unionfailure 10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10  consultation today in which we propose to change capital requirements to simplify them, remove barriers to growth and deliver a greater degree of financial resilience for smaller credit unions that are more likely to fail. We propose to:  ∙  get rid of our “slab” system and replace it with a graduated, income-tax-style approach where larger credit unions would be required to hold 5% capital for assets up to £ 8% for assets between £ and £ and 10% for assets above £ as opposed to today’s system where firms have suddenly to hold 10% on their entire asset base if they grow a single pound over £ in assets;  ∙  maintain capital requirements at 3% for credit unions with total assets less than £ but introduce a “monitoring zone” of 3-5% whereby if a smaller credit union’s capital falls below 5% we would step up our supervisory activity.