. until the roosevelt new deal era 1933 banking act in the usa, no depositor in an american bank could have been assured of clear supervisory oversight, following a century of uncertainty about state and national authority over banks and the issue of bank notes. in the uk, the first statutorily - backed regulatory regime was put in place only in 1979. prior to that time, the bank of england had exerted only informal authority, including through the venerable “ governor ’ s eyebrow ”. both the us and the uk acts were prompted by preceding banking crises. in hong kong, the office of the commissioner of banking was only established around 50 years ago in the 1960s, after a couple of rather unpleasant bank failures. before then, banking was basically a free for all, although it did not mean that it was a wild jungle ruled by tarzan or the lion king. back in those “ good old days ” during which banking supervision was not a prominent feature of our financial system, bank customers and depositors had to take care of their own interests by choosing very carefully who they could trust and bank with. it should also be borne in mind that internationally, the first basel capital accord was only approved by the g10 governors in 1988, meaning that we are only just approaching the 30th anniversary of this important milestone. 6. i know that you are going to say : you cannot find such a clock or time machine. in that case, the fast track solution is not quite available. so you will have to consider the slow track solution in trying to get rid of the bank supervisors. as i said earlier, a world in which there were no banking supervisors was not a wild jungle. for a long long time and well 1 / 5 bis central bankers'speeches before we had bank supervisors, bankers needed to earn the trust of depositors and customers in order to survive and thrive. those who failed to earn the trust of customers would not and could not last long. so by and large bankers who managed to survive were highly trusted and respected by the community in the “ good old days ”. unfortunately this is no longer the case in recent decades, especially after the global financial crisis ( gfc ). so something has changed that has led to the erosion of trust in bankers. only if we can restore that trust, and the fundamentals underpinning it, could we have a meaningful discussion on the proposition of getting rid of the bank supervisors. 7. banking has indeed changed a great deal from what it used to

norman t l chan : how to get rid of banking supervisors keynote speech by mr norman t l chan, chief executive of the hong kong monetary authority, at the lion rock institute freedom dinner, hong kong, 22 november 2017. * * * nick ( sallnow - smith ), founders, directors and members of the lion rock institute, daniel ( hannan ), ladies and gentlemen, 1. it gives me great pleasure in joining you today. 2. after accepting the institute ’ s invitation conveyed by peter wong, i thought hard about what to talk about in front of such a learned and distinguished audience that support and cherish economic freedom. i was also mindful that i should come up with an inviting title that helps sell the tables. i hope i have achieved this, at least by attracting a few more senior bankers to help foot the dinner bill. 3. nowadays a common theme that bankers often talk about when they meet each other is how their lives have become so much tougher, thanks to ever more stringent standards demanded by regulators and supervisors. not only are banks required to hold a lot more capital as well as liquidity to meet unexpected contingencies, there is constantly increasing demand by the supervisors to deal with conduct risks. everyone is familiar with the escalating compliance burden and pressure on banks in tackling anti - money laundering, counter - terrorist financing, international sanctions, mis - selling, etc., not to mention the hefty financial penalties slapped on banks for violations or breaches. so it is natural and indeed understandable that bankers harbour grievances and misgivings towards bank regulation and supervisors. and this is why the topic i am going to talk about is a very attractive theme to them. they would like to hear from a supervisor speaking on a subject that they can normally only discuss privately amongst themselves. 4. first of all, let me give you the good news! as i see it, there are two ways to get rid of bank supervisors, one fast track and the other a slow track. let me start with the fast track! 5. if you can find a clock or time machine that would allow you to dial back time to 100 years or so ago, then you would find yourself in a happy world where there was little or even no banking supervision. contrary to common belief, banking supervision as a profession or industry ( or, as some bankers would no doubt have it, a “ black art ” ) does not have a very long history