to be an increased sensitivity of policy makers to international developments. in addition, at this juncture the jury is still out on the likely effectiveness and impact of negative interest rates as a policy tool. lastly, decisions by the credit rating agencies may have an important effect on asset prices in south africa. by this time, i am sure there is a need to replenish your refreshments, but before i conclude, allow me to take this opportunity, on a slightly different note, to announce that the bank published its official gold and foreign exchange reserves management investment policy on its website today. the investment policy outlines the governance structures, roles and responsibilities pertaining to the reserves management operations. our objective is to improve transparency around the reserves management and to align the bank with global best practices. also, you will recall that we launched the department ’ s newsletter, the fmd update, last year, which provided a high - level review of the fmd operations and projects. copies of the 2016 fmd update are available here tonight, and you will also be able to find the newsletter on the bank ’ s website. in conclusion, and to emphasise my comment at the start, the bank extends its appreciation to market participants for their co - operation and support over the years and we look forward to continuing our positive interactions in the future. last but not least, i would like to sincerely thank our financial markets team, under the leadership of leon myburgh, for the sterling work over the past year, for their dedication and commitment to the task. thank you also to our staff at the conference centre for organising this event. thank you. bis central bankers ’ speeches

are important to the continued success of financial firms, large and small. the second type of business that financial firms undertake is the provision of advisory services and distribution of financial products. this category covers a wide range of financial services, including investment banking, wealth - and asset - management and brokerage. as these firms are offering advisory services, or marketing and distributing financial products, they are not taking risk using their balance sheets. however, control and governance are no bis central bankers ’ speeches less important than for the first type of financial firms because these firms must be able to treat their customers fairly and take into account their interests in offering their advice and products. again, we have seen many instances in which a breakdown in the control of the sales process has resulted in mis - selling of financial products that were not suitable for the customers. one point i wish to highlight here is that a good control and governance framework can only be established within the financial firms from the top down. no matter how good the financial regulations are or how hard the supervisors try, external surveillance can only supplement, but not replace, good internal controls. this means that a suitably designed control system endorsed by the board of directors must be put in place to ensure that there are effective checks and balances within the firm to monitor and detect breaches of the approved risk taking parameters and code of conduct in dealing with clients. “ culture ” the last “ c ” is “ culture ”. this is a more difficult concept to explain than the first two “ cs ”. but i ’ ll try. competence basically means having the technical expertise to conduct financial businesses. it can be learned through different channels, such as formal education, in - house programmes or on - the - job training. control means having a system within a firm that monitors and manages risk - taking or the conduct of its staff. people within the firm are required to behave in a way that is prescribed by their rules. to put it in another way, people behave properly because they have to or else they would face unpleasant consequences if and when they are caught. in contrast, culture refers to a set of internal values shared by a group of people that influence and shape their mindset and behaviour. culture and values normally define what is proper and what is not. culture makes people behave in a certain way because they want to behave in that way and not because they have to. let me use a day - to - day example to illustrate this point. hong kong is now a relatively