make judgements in situations that are not always well - defined. taken in this context, the work of the fspb serves as an important anchor for decisions and actions that will engender trust in the financial industry. in a fast moving world, a strong commitment to a professional code of conduct provides the assurance that the public seeks – that financial institutions and employees are held to and will consistently demonstrate high standards of professional and ethical conduct. i hope that the industry will continue to lend its strong support to the fspb ’ s work. following today ’ s launch of the professional code, the bank would urge financial institutions and professional bodies to reflect the standards set out in the code in the values and conduct that you demand of your staff, agents and members. this needs to move beyond symbolic gestures, to the diligent implementation of policies and programs that promote the desired culture. the bank is confident that the fspb will continue to play an important role in supporting these efforts – including through its work to identify implementation challenges, develop solutions and introduce improvements to reflect emerging issues. the financial industry has demonstrated leadership in so many areas – surely none can be as important as leadership in something as fundamental as professional and ethical conduct. on that note, let me once again commend and congratulate the fspb on this important, and certainly most relevant initiative. 3 / 3 bis central bankers'speeches

jessica chew cheng lian : launch of fspb professional code for the financial services industry welcome address by ms jessica chew cheng lian, deputy governor of the central bank of malaysia ( bank negara malaysia ), at the launch of fspb professional code for the financial services industry, kuala lumpur, 24 may 2018. * * * i am delighted to be here to witness the launch of the financial services professional board ( fspb ) professional code for the financial services industry. thank you for allowing me an opportunity to offer some brief remarks this morning on the importance of this initiative from bank negara malaysia ’ s perspective. let me begin by saying that the launch of the code comes at a time when issues of culture and conduct in the financial industry have become an important focal point for financial regulators. after a hive of activity largely focused on strengthening prudential rules and standards, there is an acknowledgement that behaviour is ultimately regulated by something that runs deeper than rulebooks. it is not an easy thing to put your finger on. regulators have talked about “ the way things get done ” in an institution, or “ the human element in everyday decisions ”. we like to think of it as how one behaves when no one is watching. on this score, the financial industry could do better. despite much publicity and widespread efforts to tackle the issue, incidents of misconduct continue to cast a dark shadow over the financial services industry across the world. this is worrying, because misconduct erodes trust in the system. if investors, depositors and policy holders stop believing that their interests are being safeguarded, the entire system quickly comes unraveled at significant costs to society. these costs can arise from failures of financial institutions, a misallocation of economic resources, or simply steep fines that destroy shareholder value and employment prospects for affected workers. since the global financial crisis, banks have paid more than usd320 billion in fines and legal costs and have been the subject of numerous government financial inquiries due to misconduct. in malaysia, in the last 5 years, bank negara malaysia has imposed fines on financial services providers to the tune of rm116 million. a survey conducted by the bank revealed that almost twothirds of reported losses by banks in 2016 were associated with internal fraud, regulatory noncompliance and operational lapses. we have examined these incidents in some depth. our observations lead us to conclude that behaviour is very much influenced bycontextual factors such as organisational values, incentives and