senior management of banks to share and cherish the same value as we do in terms of treating customers fairly. in this connection, we also believe that it is crucial that banks should review and revamp their incentive systems so as to avoid rewarding staff on the basis of sales volume and commission earned, which would bis central bankers ’ speeches nurture a tendency to push financial products to customers to meet business targets without giving sufficient regard to the interests of the customers. this change in the incentive system to reduce mis - selling is taking place in the more advanced markets, and hong kong must not lag behind if we wish to continue to pride ourselves as one of the leading international financial centres. in terms of helping the customers to become smarter and more responsible, we need to enhance the financial literacy of our citizens. surely there is plenty of scope to include financial literacy education in our school and university curriculum. in addition, the hkma, in collaboration with key stakeholders such as the consumer council as well as the investor education centre set up by the sfc, is going to launch a new public education programme that seeks to help bank customers become “ smart and responsible ”. the first of a series of programmes will be rolled out in the next few months. ladies and gentlemen, i am sure all of you are frequent users of banking services. moreover, as many of you here are accounting, financial and business leaders of hong kong, i am sure you will also share my view that enhancing the financial literacy of our citizens is a difficult but worthy task, requiring the collaborations of all sectors of the community to work closely together. you are well positioned to help our public education programme, and we in the hkma look forward to your continued support and advice. thank you. bis central bankers ’ speeches

this is what we call “ universal banking ”, a regime in which banks operate like financial supermarkets. naturally, banks like the universal banking regime as it offers non - interest income such as fees and commission as well as diversification of businesses. at the same time, customers also like universal banking as it offers great convenience in the form of a one - stop service instead of having to go through different firms for different types of financial transactions or products. there is a big difference though between a bank and a supermarket – you don ’ t entrust a supermarket with your hard - earned money or life savings ; and if you are enticed by a supermarket promotion to buy something you don ’ t need, the loss is unlikely to be huge but this may not be case for investment or insurance products. you could lose your shirt. therefore bank customers require protection not only on the safety of their deposits, but also in the way that they are treated as consumers and as investors. in terms of protecting the safety of customers ’ deposits, the hkma seeks to maintain prudential soundness of individual banks. we do this through the regulation and supervision of banks and, in the unfortunate event of a bank failure, through the activation of the deposit protection scheme to safeguard customers ’ deposits up to half a million hong kong dollars per depositor. in bis central bankers ’ speeches today ’ s speech, i propose to focus not on prudential supervision but on the protection of bank customers as consumers and investors. how do we protect bank customers? so the next question is : how do we protect bank customers as consumers and investors? the answer is the very same principle : “ treat your customers fairly ”. now let me elaborate on how this can be achieved. first of all, when selling a banking product, such as a loan or a credit card the bank must ensure that the key terms and conditions are fair and equitable. the bank should also ensure that the key terms and conditions are clearly spelt out and understood by the customer. for example, when a customer wants to take out a loan, the bank should highlight the key features about interest rates and any applicable fees, charges or penalty for late or early repayments. when it comes to the selling of investment products, the situation becomes more complicated. the complication arises not only from the risk inherent in the investment products, some of which can be rather complex, but also from the special relationship between banks and their customers. banks serve a special function in