These cases often reflected misaligned incentives and insufficient attention paid to remediation actions and staff training. 9 Even back in 2009, MAS issued our Fair Dealing Guidelines. These require financial institutions and their representatives to recommend products and services that are suitable for their target customer segments. The Guidelines include supporting customers with clear, timely and relevant information to make informed investment decisions. 1/5  BIS central bankers' speeches  10 MAS expects boards and management of financial institutions to stand behind these commitments. We have recently proposed guidelines to strengthen the accountability of senior managers in charge of key functions within a firm. Under these enhanced guidelines, boards must clearly designate the officers who are responsible and those who are accountable for the conduct and business operations in their organisations. The measures will include having a clear governance and oversight framework. 11 To avoid a situation where individuals with a pattern of misconduct and transgressions simply move from one financial institution to another, or what is referred to in regulatory circles as “rolling bad apples”, MAS will further require that financial institutions conduct reference checks with the previous employers of their representatives. Carrying out reference checks is already a long-standing industry practice. MAS’ proposal will harden this requirement. 12 MAS will also step up our monitoring of financial advisory practices in the industry. One example is our mystery-shopping exercises where we send researchers to “live test” the sales and advisory processes in sampled financial institutions.

5 There are three important enablers: a culture of fostering customers’ trust in the financial industry; strong market discipline that incentivises right behaviours; and adequate and timely public disclosures of pertinent information. Engendering trust in the financial industry 6 Let me start with the theme of trust. It was a decade ago that we had the Global Financial Crisis. With a suite of regulatory reforms that followed, the global financial system is generally safer and stronger. Just being safe is not good enough. A vibrant financial sector must be able to support the smooth functioning of credit and money flows. It should meet the savings, investment and insurance protection needs of the people. Investors on their part want to have the confidence that they are treated fairly by financial institutions and that their savings are safe. This is why building trust in our financial institutions is so important. That trust goes beyond doing what is legally required, to include what is good and what is right. 7 Some of you may have seen recent reports on the Royal Commission review in Australia that investigated widespread misconduct issues in its banking industry. Financial institutions in Singapore are generally well regarded. But we have our share of malpractices too, such as the mis-selling of Lehman Minibonds and other structured or complex products. 8 Financial institutions have a duty to act in the best interests of their customers. However, in our supervisory reviews, we have uncovered lapses in conduct.