The results and the accompanying explanations will also help expose the inadequacy of management and the failure of systems.

Informed comment abounds about questionable lending practices at many of the listed and non-listed banks. There is also cause to ask whether further enquiries by outside authorities are warranted.

While the second liners remain sound, there will be very few banks in the sector that escape a marked deterioration in their loan books. This, to some extent, will reflect a recent desire among some banks to clean up their books by ending the practice of sweeping some doubtful debts under the carpet.

Although the sector as a whole is expected to return a generally weaker but mixed performance, it is widely expected that two listed banks will slide into the red and losses are likely to be widespread among the non-listed groups.

In the light of these forthcoming profit statements, two relatively small aspects of the recent report on the banking sector by the Hong Kong Monetary Authority (HKMA) which recommended interest rate deregulation, take on additional relevance.

These initiatives strive to bolster transparency, accountability and supervision, which have been found to be woefully inadequate.

Choosing its words carefully, the HKMA says in the report it has discovered 'a number of cases' where directors had not acted 'as effectively as they might'.

In part, this was due to the calibre of people in charge who lacked managerial experience.

It is encouraging to see that in recent months there have been several appointments which reflect a desire to address this shortcoming.

Perhaps of more concern is the HKMA's comment that the lending policies of some banks were influenced by the interests of large shareholders or senior executives without due supervision by the board of directors.

Such practice left the gate wide open for executives and shareholders to steer loans on highly favourable terms and conditions to business associates or related parties.

This is understood to have raised considerable interest among third parties amid the tangle of debt that the practice helped create.

In an effort to strengthen supervision, the HKMA is endeavouring to add teeth to a guideline on the role and functions of audit committees.

Under the present rules, there are ways banks can skirt around the necessity to retain an audit committee that functions in anything resembling an independent fashion.

The HKMA is understood to be aiming to make the desired change to the guideline by the first half of next year after undertaking a review.

Implementing the change will be a challenge but it will certainly give the interests of minority shareholders an extra line of defence and drag practices more into line with international standards.

The other measure intended to place a block before reckless lending is the formation of a credit register.

This will have the effect of establishing a centralised tally of banks' exposure to individual companies.

The diverse structure of Hong Kong's banking industry laid the way open for companies to borrow across a broad front.

Although the sum borrowed from each bank may have been relatively small, collectively the total was unmanageably large when the crunch came.

An international study is being undertaken into how such a register could operate with a clear preference for its functioning to be out-sourced to the private sector.

Taken together, these two measures will encourage a much overdue move towards improved standards.

They will also prove a valuable lesson from the aftershocks of the regional crisis which will continue to reverberate around the sector even after next month's profit reports.

Jake van der Kamp is on holiday