standards, the three local banking groups are still rather small, despite having made some regional acquisitions and undergone domestic consolidation. the largest of them, dbs group, ranks only 96th in the world in terms of assets. the banks are also mainly singapore banks, rather than regional players with strong presence in several countries. possibilities for domestic growth are limited, other than by further consolidation. but countries in the region like india and korea are opening up their financial sectors to foreign participation, and other regional and global players are starting to explore these opportunities. the local banks would be conscious of these industry trends. does size matter to the local banks? there are differing views. one view is that it does, because economy of scale is increasingly important. the pursuit of size in the global financial industry has been underway for several years, and despite some less - than - successful mergers overseas, is still on - going. the most recent merger between bank of america and fleetboston financial would create the second largest us bank with total assets of nearly us $ 1 trillion and operations across 34 countries. in this view, size also enables a bank to diversify across geography and products, which gives it a much stronger base. this is the way the industry is moving. if singapore banks do not make it to be significant regional players, at least, then they risk being marginalised, and perhaps eventually being absorbed by other players. however, there are others who maintain the contrary view. they hold that size is not essential for banking or financial industry success. there exist successful smaller players who excel in particular markets or specialised areas of expertise, and singapore banks can be among these. furthermore, banks can only expand as fast as they can grow their business or assimilate new acquisitions. overrapid expansion can result in weaknesses and mistakes, and turn a small but strong operation into a large but vulnerable one. it is up to the singapore banks and their shareholders to consider these opposing arguments and continually reassess their strategies. they will need to decide whether they need further scale to compete effectively, and if so whether it should be achieved through consolidation at home, expansion and acquisition abroad, or a combination of both. mas cannot make this judgment for them, though the continued strength of our banking system depends on their making the right judgment call. whatever the outcome, we need a core of strong local banks, as the stability of our financial system hinges on that. overall, the prospects for our financial centre look good. last year,

ceca ) with india, we are exploring closer integration of our financial markets. both countries stand to benefit if our financial sector players can operate seamlessly between the two markets. while there are many regulatory and other issues to be addressed, we see this as a unique opportunity for both india and singapore. empowering consumers to achieve fair dealing third, we must empower consumers to achieve fair dealing. this will help us to develop a more informed and savvy consumer market, which is necessary to grow a vibrant financial sector. with liberalisation, there are now more channels for savings that entice investors with higher yields, such as bonds, equities, unit trusts, hedge funds, and insurance and annuity products. these products also carry higher risk. has consumer sophistication risen in line with the complexity of financial products? as consumers seize new investment opportunities, how far should mas safeguard their interests? mas no longer practises merit - based regulation of products. it is neither feasible nor desirable for mas to prescribe what consumers can or cannot invest in, how these products should be priced, or what terms and conditions should govern transactions. this would inhibit business enterprise, restrict consumer choice, and raise compliance costs. mas cannot intervene in commercial disputes with individual institutions or arbitrate on contractual matters. therefore, in 1997, we stated the rule should be “ caveat emptor ” - let the buyer beware, and watch out for his own interests. however, we have not left consumers entirely alone to fend for themselves. there may be an imbalance of power between consumers and financial institutions. consumers may lack information and resources to participate confidently and knowledgeably in the marketplace. thus, mas has helped to empower consumers and to promote fair dealing by establishing a regulatory framework for increased information disclosure and sound market and business conduct standards. this regulatory regime requires offerors of investments to provide full, timely, accurate and meaningful disclosure of information to consumers, on a continuous basis. the intent is for consumers to make their own informed decisions. one objective of the “ money - sense ” financial education programme is to equip consumers with the skills and tools to evaluate financial products, judge the risks involved and take responsibility for their actions. to address the issue of mis - selling and misrepresentation by financial intermediaries, mas has facilitated the setting up of affordable and efficient channels for aggrieved consumers to seek recourse. this is necessary if market discipline