Sir,
SPEECH BY THE HONOURABLE THE FINANCIAL SECRETARY IN LEGISLATIVE COUNCIL: WEDNESDAY 19 MARCH 1986
HKMOQ/1
RECEIVED
DEST INDEX
- 2 APR 1986
PA
Pet Phomes
Five Barkey
BEM
Y
sklon Taken
I move that the Banking BillT986 be read the second time.
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As I said in my budget speech last month, this significant new Bill
is the product of extensive consultation. There has been unanimous agreement by all concerned on the policies to be adopted. The Bill now provides a unified approach to the supervision of banks and deposit-taking
companies, referred to as "authorized institutions". It carries over from present legislation provisions to regulate banking business and the business of taking deposits. The aims of the Bill are to provide a measure of protection to depositors and to promote the general stability and effective working of the banking system. When enacted, it will replace the existing Banking Ordinance and Deposit-taking Companies Ordinance. Few things are more important to Hong Kong than sound banking - the backbone
to our economy.
It is a long Bill. A number of proposals in it represent new
departures in prudential supervision in Hong Kong. But many of its provisions are the same as those in the two existing Ordinances. There is a convenient comparative table at the back of the Bill showing whence each
of the 153 clauses and the 5 Schedules comes. There is also the useful
explanatory memorandum giving a fairly detailed description of the various parts and clauses of the Bill. I shall not repeat them here. Instead !
shall restrict myself to explaining the main new proposals in the Bill.
They relate to six areas: the Commissioner of Banking's role; audit;
ownership and management; restriction on loans; capital to risk assets
ratio; and liquidity ratio.
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