EU's Kroes says time "smart" bankers show respect

* EU competition czar attacks arrogance among bankers

* Kroes - time bankers showed respect to taxpayers

* Kroes urges investors to demand change

By Foo Yun Chee and John O'Donnell

BRUSSELS, Nov 12 (Reuters) - Bankers should not be allowed to think they are smarter people who deserve different rules and better pay, the European Union's competition chief Neelie Kroes said on Thursday.

In a hard-hitting speech that comes as the European Union is examining a raft of tough new rules for banks, Kroes said bankers should show some respect to customers and the taxpayer.

"Too often bankers think they are better, smarter people who deserve different rules and different pay to everyone else," she told an industry event in Amsterdam.

"They can only think that if others let them."