The GFC has also undermined the belief that banks can look after themselves in efficient markets and that “de-regulation” and “light touch supervision” must be good as they promote financial innovation and diversity. As a result of these bitter lessons, a series of profound reforms championed by the G20 and the Financial Stability Board, of which the HKMA is a member, have been introduced to make the banking and financial system much more resilient to shocks. An informed banker will tell you that banks nowadays have to comply with a very long list of stringent standards in capital, liquidity, leverage, margining, risk management, derivative trading and reporting, etc. At the same time, there are new and strong measures designed to address misconduct risks, ranging from anti-money laundering and counter terrorist financing, front-running, insider trading, mis-selling of financial products, etc. 13. For those bankers who feel disappointed tonight because they cherish the hope that they would learn some clever tricks to get rid of bank supervisors, I owe them an apology. However, the consolation is that, in my view, banking supervision is not an “all or nothing” game. While it is true that the kind of “cozy” or “light touch” supervision that was prevalent before the GFC is now out of the question, there is still a great deal of space in how we calibrate the “intensity” or “intrusiveness” of banking supervision in order for the process to be effective while not creating an undue burden on banks.
We have also required banks to improve their corporate governance by setting up a Board level committee, chaired by an INED, to oversee corporate culture and to ensure that their compensation arrangements are aligned with the culture and values of the bank. These efforts are ongoing and I am afraid that it is not a mission that can be accomplished overnight. So for the time being, there is still a need for supervisors to be around and so you don’t really have to worry that I will be out of a job any time soon. 19. Again, my apologies to those of you who have been attracted to this dinner because of the title and did not get too much joy from what I have said. But don’t lose hope yet, as some of you may still be able to find or invent a time machine that can turn the clock back to the “good old days”. I am sure that bankers in Hong Kong would be very willing to pay a high price for such machine. 20. Thank you very much. 1 Charles Goodhart, (2017) “Has regulatory reform been misdirected?”, Journal of Financial Regulation and  Compliance, Vol. 25 Issue: 3, pp.236–240. 5/5  BIS central bankers' speeches