It has established technical working groups to address inter alia consolidated supervision, crisis management and Basle requirements and has put in place the requisite instrument to facilitate information sharing and cooperation with foreign regulatory bodies. Your members are also active participants in supervisory colleges where banks span several countries and I am aware that yesterday three supervisory colleges were held. Much emphasis has been placed on ensuring that the banking sector remains safe and sound, however, there are non-bank institutions that could severely threaten such safety and soundness and consequently the same level of attention/emphasis should also be directed to those institutions. Perhaps, CGBS could consider expanding its conference scope in the future to include regional non-bank regulators with whom your constituents interface. Both banks and non-bank financial institutions are integral to the safety and soundness of the financial system. Ladies and gentlemen, let me conclude by saying that our approaches to supervision and the depth of our regulation would continue to require proactivity and enhancement as the financial landscape continues to change. The Central Bank Governors of the region will continue to rely on the CGBS to provide the advice and guidance needed to keep our region safe. Success in this regards depend on the thoroughness and robustness of your work and 2  BIS central bankers’ speeches  the reliability and efficacy of the methods you employ.

While measures to reduce financial exit costs have met with some success in reducing switching barriers within the financial industry, responding to other factors that discourage consumers from switching to a superior product or financial service has been more challenging. Such factors include the additional effort required to switch financial service providers or products arising from the higher marginal cost of switching. Finally, the measures to strengthen redress mechanisms are also contributing to the enhanced capability of financial consumers, by providing an expedient and cost–effective means for consumers to assert their rights and protect their interests. Effective redress mechanisms also increase consumer confidence in using financial services, while serving to strengthen market discipline. Looking ahead, strategies to further strengthen these foundations are likely to be significantly influenced by two important developments. The first is the broader application of behavioural finance so as to better understand and identify the levers that contribute to better financial decisions in the different circumstances. Recent insights from the study of behavioural finance suggest that emotional and psychological associations with finance are as powerful as the intellectual grasp of how to make wise financial choices. This will have important implications for the design and implementation of both consumer protection policies as well as financial capability strategies. We have found that providing consumers with relevant information in Malaysia did not always lead to better decisions. This was frequently because it was not easy to understand the information and there was also too much of it.