Banks should pay attention to consumer feedback for early warnings of potentially larger issues and proactively take steps to address emerging customer concerns early. The ABS Code of Consumer Banking Practice is premised on four key principles – fairness, transparency, accountability and reliability. These principles are a good foundation for building a trusting and open relationship between customers and their banks. As members of ABS, we encourage you to uphold and observe these principles. You are best placed to raise standards through market discipline, industry codes and guidelines. Together, ABS and banks can do more in monitoring consumer feedback on industry practices and taking steps to manage consumers' concerns at an earlier stage before they become broader public issues. For example, ABS could initiate measures to identify emerging issues, conduct research to better understand consumers' concerns and work with member banks to address them. Individual banks could also do more by reviewing their customers’ feedback, sharing their observations on concerns regarding industry practices and working with ABS to manage these issues. MAS will continue to share with the industry our observations from feedback received from members of the public. We will also continue to work with the industry to encourage best practices by banks, with the aim of achieving good consumer outcomes. This more collaborative and consultative approach, we believe, is more desirable than formal and often more prescriptive regulation. Conclusion The Singapore financial services sector looks set for another year of good growth.
To complicate matters, we must not forget the geopolitical risks in the Middle East, terrorism and other surprises. This year, we have already had several reminders of the risks in the system. The Chinese stock market has experienced a few incidents of volatility following expectations of and actual government action. It remains vulnerable to further corrections. In the US, the sub-prime market has imploded. More recently, US treasuries have come under severe selling pressure, causing interest rates to rise and generating unease in stock markets. Nevertheless, the financial system has been resilient so far. Have we learnt our lessons from past crises and are now better prepared? Or are we just plain lucky? Whichever the answer, we should remain vigilant. As bankers, you will be familiar with the saying that bad loans are made in good times. This saying is particularly worth repeating when the environment appears rosy and serves as a reminder that vigilance is our constant responsibility. With this in mind, MAS initiated a survey of risk managers and traders, many of whom are based in Singapore, about their key risk concerns. This poll was conducted between April and June this year. A roundtable discussion was also held with risk managers. Let me now share with you some of the findings from this survey. The feedback received was open and honest and many views were shared. Most respondents believed that asset prices were frothy and that a big shock could happen. Some speculated that this could happen before the end of 2008.