In his latest Viewpoint column, Mr Yam said financial integrity is crucial to any economy as financial intermediation must be conducted in a safe and efficient financial system, to promote economic growth and development.

"Competition drives efficiency, but clearly we must guard against competition eroding profitability to such an extent that it forces financial intermediaries into improper or imprudent behaviour that eventually undermines the stability and integrity of the financial system."

He said although guidelines and rules can be issued, the private sector still needs to do business without regulators examining and approving every deal.

Noting education is also important in safeguarding investors' interests, he said the Deposit Protection Scheme, to be introduced later this year, will help those unable to protect themselves.