is credibility. it is not enough just to sell good quality products to customers. like any world class brands in cars, watches and luxury goods, post - sale maintenance or support service is equally important. in other words, the success of a “ brand ” also rests on establishing a reputation for being credible – to deliver a product that stands up to what it is sold for. 22. credibility is even more important when it comes to financial services. this is because financial products usually have a finite life, and very often customers need to renew or purchase similar or different products from time to time. to develop into a long - lasting and successful “ brand ”, hong kong must be able to provide a platform for offering products that can effectively meet the changing needs of customers. while such needs are always evolving, one thing never changes, and that is “ fair treatment of customers ”. in the context of pricing, consumer / investor protection, distribution, dispute handling and resolution, the interests of the financial firms or intermediaries must not take precedence over those of the consumers or investors. this is a difficult mission to accomplish as it requires not only a robust and yet user - friendly regulatory regime, but also a corresponding change in the culture, values, mind - set and behaviour of the financial firms and their staff. as hard as it seems, i strongly believe that we cannot afford not to accomplish this mission. we must try harder and harder until we have got it right. i simply cannot envisage how a financial centre can thrive and sustain its competitiveness over time if it cannot build a credible reputation for treating customers and investors fairly. conclusion 23. ladies and gentlemen, with quality products credibility of fair treatment, trust of customers will follow naturally. customers who use hong kong for their financial needs would feel safe because they know, and trust, that their moneys and wealth are in good hands and that their interests are being looked after. if you earn the trust of the customers, you have won their loyalty as well. with the reputation and words of mouth, more customers would wish to use hong kong as the hub for their financial transactions. however, the regulators and the government cannot do it alone. the private sector, the industry and the practitioners must also own this mission and, most importantly, join hands with the public sector to do it together. this is how we can build “ hong kong ” as a world class brand for financial services. thank you very much. bis central bankers ’ speeches

supply side of the economy. in the case of a negative demand shock, both economic activity and inflation will tend to fall. typically, a financial crisis is one example of a negative demand shock : credit conditions are restricted, aggregate demand is restrained and firms are encouraged to undercut their competitors, thereby exerting downward pressure on inflation. to the extent warranted by the magnitude of the shock, the central bank thus faces an unambiguous policy prescription, namely to provide additional monetary accommodation. in the case of a negative supply shock, the central bank has a policy dilemma as economic activity and inflation move in opposite directions. a drop in productivity is a case in point : an increase in companies ’ cost per unit of output makes production less rewarding, and thus lowers the amount of goods and services supplied relative to demand. here, the central bank either temporarily accepts higher inflation, or – in an attempt to keep inflation right on target – it reinforces the disturbance driving down output. but this trade - off is weakened when the central bank can credibly commit to its price stability objective. knowing that the steady state remains the ultimate goal of policy, private agents will not factor in the temporary increase in inflation into their price - and wage - setting behaviour. as a consequence, the central bank can afford a more measured conduct of policy in the face of a negative supply side shock. of course, this is not to say that central banks have carte blanche to adopt any tool or tactic that may appear suitable for dealing with any short - run challenge. the way policy is conducted can, in itself, impinge on the central bank ’ s credibility to meet its objective. one example is the monetary financing of fiscal deficits, which may severely undermine the capacity of a central bank to freely decide on an appropriate course of action. the flexibility of policy conduct is clearly limited to those measures that preserve the central bank ’ s room for manoeuvre to independently determine its monetary policy stance – now and in the future. to summarise, for a central bank to be able to confront short - run challenges while anchoring long - run expectations, it must stick to three principles. first, it has to consistently and unambiguously align any policy action with a clearly specified objective. second, it has to adjust its policy conduct flexibly to the specific nature of the macroeconomic shocks hitting the economy. and third, in doing so it has to design its policy conduct in a way that does