The Hong Kong Monetary Authority (HKMA) released today (Wednesday) a second consultation paper on the proposed introduction of deposit insurance. The paper sets out the HKMA's detailed proposals on how the deposit insurance scheme (DIS) in Hong Kong should be structured.
Following the Executive Council's approval in principle for the establishment of a DIS in Hong Kong, the HKMA has undertaken in-depth studies on the various aspects of this subject. Two focused consultations, one on netting arrangements and one on the funding approach of the DIS, have been completed over the past year.
"We have now substantially completed the consideration of how the DIS should be structured. In developing the proposals, we have drawn reference from the practices and experiences of leading deposit insurers in the world. We have also benefited from the advice provided by insolvency practitioners in Hong Kong," said Mr David Carse, Deputy Chief Executive of the HKMA.
A key consideration in the design of the scheme has been to keep the cost low and to minimise the potential moral hazard. Bearing this in mind, the HKMA recommends that the DIS in Hong Kong should contain the following features:-
The consultation paper also contains proposals to deal with issues such as an appeal system for the scheme, protection of multi-beneficiary accounts, treatment of accrued interest, investment of the DIS Fund and co-ordination between the Board and the HKMA. A summary of the HKMA's detailed recommendations can be found at Annex A of the consultation paper, which can be downloaded from the HKMA's website.
Members of the public are welcome to submit their comments to the HKMA before 31 May 2002. Taking into account the comments received, the HKMA will proceed to prepare the relevant bill which should be ready before the end of this year.
For further enquiries, please contact:
Thomas Chan, Senior Manager (Press), at 2878 1480 or
Sylvia Yip, Manager (Press), at 2878 1687
Hong Kong Monetary Authority
27 March 2002