Effective regulation and robust systems are essential to the integrity of Hong Kong's financial system, as fierce competition may contribute to services providers' impropriety, Hong Kong Monetary Authority Chief Executive, Joseph Yam stated last week.
In his latest Viewpoint column, Mr Yam argued that financial integrity is crucial to any economy, as financial intermediation must be conducted in a safe and efficient financial system, to promote economic growth and development.
"Competition drives efficiency, but clearly we must guard against competition eroding profitability to such an extent that it forces financial intermediaries into improper or imprudent behaviour that eventually undermines the stability and integrity of the financial system," the HKMA chief wrote.
However, he added that although guidelines and rules can be issued, the private sector still needs to do business without regulators examining and approving every deal.
Noting that education is also important in safeguarding investors' interests, he said that the Deposit Protection Scheme, to be introduced later this year, will help those unable to protect themselves.
Mr Yam's full comments on effective regulation can be found in the Tax News Resources section.
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