SINGAPORE - An overhaul of the once-revered banking industry is needed for banks to regain public trust, according to DBS chief executive Piyush Gupta.
He told a group of 150 students and finance industry professionals that it is "incumbent on bankers to define a code of conduct relevant to the times".
The 2008 financial crisis highlighted several troubling issues in the industry, he added, citing ineffective boards, the outsourcing of risk assessment to rating agencies and the creation of overly complex derivative products.
"Banks have become so enmeshed in the macroeconomy and in one another... The notion of privatising gains, but socialising losses, is also an issue," said Mr Gupta, who chairs the Association of Banks in Singapore.
Banks in Asia did not suffer as much as their Western counterparts, thanks to lessons learnt from the Asian financial crisis of 1997. Mr Gupta said the Asian crisis was an "educational" one, which resulted in stronger regulatory policing and gave banks a sense of "broader stakeholder considerations" beyond maximising profits.
Asian financial markets are also less well-developed and less exposed to complicated derivative products, he noted.