-
5
family
related
closely-owned by
a large extent with
The smaller banks,
will shareholders
traditionally
business to
undoubtedly be
interests and doing
affected
limitation on loans provisions of the Bill (clauses
(clauses 79-95), and
not
capital adequacy
ratios.
by the
Whether the
likely
proverbial
for
smaller banks smaller
"man
the
the
in
increasing
only by disappearance of the limited number of remaining
service capability for
and
their
the
street"
is
a
proper
price
to
pay
sophistication and size of Hong Kong as
of
a financial market place
is in any event inevitable
or
Historical
ΟΙ international standing, actually preferred, is perhaps an academic question. examples can likely be found of banks which survived because of the concentration of risk to a single name or sector affiliated
with it, while other banks with an
diversified acceptable exposure and fully supervised got concurrently into difficulties.
also be welcomed in the Bill is the
should What
the Third (in
with
Schedule) of some
off-balance
inclusion
sheet
risks, given the concern of bank supervisory authorities in many
the growing practice countries
of securisation of debt.
and time Only
will tell
the experience
whether
risk
classifications are realistic and do in fact correspond to actual loss experience of a sufficiently representative sample of financial institutions governed by the Bill.
the
The Banking Bill classifies perpetual floating rate notes as capital, and those issued and qualifying for purposes of clause 3 of the Third Schedule amount to over US$ 8 billion, of which US$ 1 billion is said to be held in Hong Kong. An issuing bank is allowed to count the notes for not more than half of its paid-up capital, but since they qualify as share capital in the application of clause 87, subject to the exemptions of sub-clause (2) thereof, institutions governed by the Bill holding such notes will face restrictions. Claims that this will affect the issue,
the
price of these
and trading,
consequently
the
notes
are