respect to these instruments include whether there should be a more coordinated european framework for their introduction. * * * communication borrower - based measures such as loan - to - value and debt - service - to - income, debt - to - income or loan - to - income ratios have been introduced in a number of european member states over recent years. prior to the financial crisis, these type of measures were deployed in mainly non - european countries ( including south korea, hong kong, singapore and others ) and there is empirical evidence regarding their potential effectiveness in reducing risks to financial stability. 2 the 1 / 5 bis central bankers'speeches evidence however is rarely clear cut and the impact of such measures can vary depending on, among other things, characteristics of national housing markets and the position in the financial cycle. whilst subject to intense debate, when we introduced the mortgage measures in 2015, the legacy of the crisis was still at the forefront of many people ’ s minds. this, to some degree, facilitated the subsequent broad societal understanding and acceptance of the measures. our two primary objectives when introducing these measures were, first, enhancing the resilience of households and banks to economic and financial shocks and, second, reducing in a structural way the pro - cyclicality that can be inherent in housing and credit markets by capping the amount of high ltv and lti mortgages allowed at any time. however, while we have emphasised in all our public communications that it is not our objective to target house prices, this has proven in fact to be a very difficult message to get across to the public. underlying much of the public discourse on the mortgage rules is the central issue of affordability. in this context, it has been challenging to explain ( i ) that house prices are determined by a complex interaction of supply and demand side factors, ( ii ) that although our measures may impact on prices – that is not their primary goal, and ( iii ) that housing market policy issues like taxes, building measures and the shortage of supply of housing for buyers and renters are outside of our remit. our view is that not only would it be extremely difficult to choose an appropriate target for house prices but also extremely difficult to hit this target. financial sector regulations cannot address these issues, which must instead be addressed by other targeted policies. 3 to banks, we have also had to carefully explain that these are limits, not targets. we continue to monitor their risk appetites in this regard. figure 1 shows the recent history

norman t l chan : focus in hong kong on treating customers fairly speech by mr norman t l chan, chief executive of the hong kong monetary authority, at the treat customers fairly charter launching ceremony, hong kong, 28 october 2013. * * * welcome to the treat customers fairly charter launching ceremony. i am pleased that representatives from 22 retail banks in hong kong gathered here today to sign the charter, pledging to implement the five high - level principles set out therein. 2. a customer - based, customer - oriented corporate culture is what we always applaud and hope for. this is true regardless of industry. however, not every industry or company is able to achieve this, particularly when they are under the pressure of increasing market competition and the need for profit - maximisation, it is not uncommon for some companies to adopt sales and marketing practices that may undermine consumers ’ interests. it has therefore led to the development of different consumer protection mechanisms in modern societies to address such issues, for instance, hong kong has established the consumer council in this context. nevertheless, the international community is increasingly concerned about the interests of financial consumers in recent years. in late 2011, the organisation for economic co - operation and development ( oecd ) has announced a set of high - level principles for protection of financial consumers. it is now in the process of developing effective approaches for implementing the principles with a view to promoting the principles to g20 members. 3. benchmarking against the oecd principles and the practices of some advanced economies, the hkma is of the view that hong kong has been doing quite well in protecting bank customers ’ interests. we also strive to make changes and improvements from time to time. yet, i believe there is a need and room for further improvements as to how banks deal with their customers. this is because bank customers are essentially entrusting most of their liquid assets or funds with banks that they trust. trust between banks and their customers is beyond that between general service providers and their customers. also, as compared to other financial institutions, it is indeed easier for banks to earn confidence and trust of their customers. in addition to bringing business opportunities and profit to banks, customers ’ confidence and trust in banks are also the cornerstone for banking and financial stability. 4. let me borrow a famous quote and put it simply that with “ great trust ” comes great responsibility. first, banks should ensure their prudential operation and risk management are in place to safeguard customer deposits. second