If only a few more senior government officials would adopt the practice of monetary chief Joseph Yam Chi-kwong in writing a weekly column on his Web site the discussion of public policy would be enormously improved. But then, of course, they would also invite more counter-argument from other columnists. In his latest offering, Mr Yam once again raises the question of whether we need more protection for bank customers in an environment where bank services have become more complicated and banks are, for the first time, to charge fees for some services. It is an entirely legitimate question of public interest but Mr Yam makes two assertions that I would rather not see go uncontested. In the first he points out that bank customers have benefited from greater competition among banks to the extent of mortgage rates that have now fallen well below the best lending rate. He then says: 'This is good for consumers but not so welcome to the banks, which have seen their margins squeezed. It is understandable that, under such a competitive environment, banks would consider charging, or increasing the fees and charges, for their services so as to reflect better the costs in the provision of such services.' This, however, is not why banks want to impose fees and charges. In fact, their margins have not really been squeezed so badly at all. Let's remember that they have also dropped deposit rates recently. Do the exercise, Mr Yam. First calculate the average interest cost of Hong Kong dollar bank deposits weighted by the share in current, savings and term accounts. Then subtract this figure from the best lending rate. Your result, the interest margin, is represented by the red line in the chart and it is still a very tidy figure. You have to go back to the early 1980s to see it much higher. You get a lower margin when you subtract the weighted cost of deposits from the average mortgage rate, the blue line, but then let us remember two things. They are that mortgages account for only a third of the banks loan book and that this margin is still more than seven times as great as the 40 basis points mutual funds charge good clients. The banks are not badly squeezed yet. They will become squeezed, however, if interest-rate deregulation brings higher deposit rates. The margin from which they previously funded those services will then vanish. It will be a much more efficient system - pay up for what you get on both sides of the equation. Hidden subsidies have never really served consumers well, not in telecommunications, not in transport, not in public services and not in banking. But, if Mr Yam believes low mortgage rates are the reason banks want service fees, then he may argue they no longer need them when mortgage rates rise. It is a misapprehension that could cause problems later. Finally, Mr Yam also asks whether bank customers can really sort their way through all the information they need to choose what bank they want in the new deregulated regime. Good question, sir, and part of the answer lies in your own hands. Why are we the only jurisdiction in Asia which conceals figures on the capital and reserves of banks? This is where people should start when choosing a bank and, please, sir, no confusion this time with the capital account on the balance of payments. Graphic: mon17gbz