Fostering a culture of trust in the financial industry A second growing focus in the supervisory agenda is to help foster a culture that motivates the right ethical behaviour and responsible risk-taking in our financial institutions and markets. But it will require different and novel approaches because there are limits to what externally imposed rules can do to promote the right values in financial firms. The financial industry continues to be plagued by egregious misconduct, nine years on from the global financial crisis. In the US and UK, major retail banks are still settling charges against them for mis-selling investment and insurance products in the run-up to the financial crisis. Across financial centres, traders at several banks were found to be involved in flagrant manipulation of key financial benchmarks. Internationally, regulators have been cracking down on illicit fund flows, with several financial institutions being penalised for lapses in money laundering controls. In Singapore, we have taken decisive actions against financial institutions that fell short of our anti-money laundering standards. MAS shut down two banks and fined several others, and culpable individuals have been charged in court and sentenced. Reform of the financial industry will not be complete until this issue of trust and ethics is addressed. We need to “get the culture right”. This will require collective effort by regulators, the industry, and financial institutions. The FSB and IOSCO have been driving international efforts to reduce misconduct risk, focusing on governance and incentive structures, conduct standards in wholesale markets, and the reform of financial benchmarks.

Ravi Menon: Financial regulation - the forward agenda Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Australian Securities and Investments Commission (ASIC) Annual Forum 2017, Singapore, 20 March 2017. * * * Mr Greg Medcraft, Chairman of the Australian Securities & Investments Commission, Distinguished guests, ladies and gentlemen, good morning. I am happy to join you for this ASIC Annual Forum on “Future Focus”, and congratulate ASIC for the choice of a timely topic. The global financial system experienced nine years ago a most devastating crisis. In response, we saw the implementation of perhaps the most wide-ranging set of regulatory reforms ever. We are now at an inflection point. I see three key areas of focus in the regulatory agenda going forward: First, take stock of the reforms to-date, with a focus on evaluating their effectiveness and effects. Second, go beyond rule-setting to foster a culture of trust and risk governance in our financial institutions and markets. Third, position regulation for the technological changes sweeping the financial industry, to harness the opportunities they present while managing their risks. Evaluating the effects of regulatory reforms Let me start with a stocktake of the regulatory reforms. Basically, the reforms set out to address the fault-lines that caused or exacerbated the global financial crisis of 2008. There are four key thrusts: Build resilient financial institutions. This is being done chiefly through the Basel III reforms, strengthening capital and liquidity buffers in banks. End too-big-to-fail.